Blog Post: Understanding the Involuntary Loss of Employment (ILOE) Scheme

The Involuntary Loss of Employment (ILOE) Scheme is a social security initiative designed to provide financial support to employees who lose their jobs due to reasons beyond their control. Implemented in the UAE, the scheme helps ensure financial stability for workers while they search for new employment opportunities. New hires must subscribe to the ILOE insurance at the beginning of their employment to ensure they are covered from the start.

Purpose of the ILOE Scheme

The primary objective of the ILOE scheme is to provide a safety net for employees facing involuntary job loss. It ensures that workers receive temporary financial compensation to cover basic living expenses while they transition to a new job. This scheme is part of the UAE’s broader efforts to enhance employee welfare and promote labor market stability.

Frequently Asked Questions (FAQs)

1. Is subscription to the Involuntary Loss of Employment (ILOE) scheme mandatory?

Yes, subscription to the ILOE scheme is mandatory for all employees in the UAE, including those in the private sector and federal government entities. Employees must enroll to comply with labor regulations and secure their financial protection in case of job loss.

2. What happens in the event of non-payment of the insurance premium?

Failure to pay the insurance premium on time can result in penalties and fines. If the premium remains unpaid for an extended period, the policy may be canceled, and the employee may be subject to legal consequences, including a potential ban on future insurance applications.

3. If the insured fails to pay the insurance premium for a period exceeding three months according to the agreed payment plan in the policy and the insurance certificate has been canceled, can they re-subscribe?

Yes, the employee must re-subscribe through a new insurance policy if their previous coverage was canceled due to non-payment.

4. How is the insured person who works on a commission basis classified?

Employees working on a commission basis are classified based on their employment contract and the nature of their work. If they meet the eligibility criteria for the ILOE scheme, they will be covered under the policy.

5. What is the period for submitting a claim for ILOE insurance? And what are the claim channels?

Employees must submit a claim within 30 days from the date of job loss. Claims can be filed through official channels such as the ILOE portal, insurance providers, or designated government service centers.

6. What are the conditions to be eligible for the Insurance Coverage/Compensation?

To qualify for compensation under the ILOE scheme, the insured must meet the following conditions:

• The insured must have been enrolled in the scheme for at least 12 months before job loss.
• The job loss must be involuntary and not due to misconduct, resignation, or disciplinary actions.
• The insured must not have an alternative income source or new employment at the time of claiming benefits.
• The insured must be actively seeking new employment.

7. What are the cases in which the insurer's obligation to provide Insurance Coverage to the insured ends?

The insurer's obligation ceases under the following conditions:

• If the insured resigns voluntarily.
• If the insured is dismissed due to misconduct or a disciplinary reason.
• If the insured fails to meet the eligibility requirements for compensation.
• If the insured secures a new job before receiving compensation.
• If the insured provides false information or fraudulent claims.

8. In the event of an absconding complaint against a private sector employee, is the employee still required to pay the insurance subscription premium?

Yes, an absconding complaint does not exempt an employee from paying the insurance subscription premium. However, absconding cases may lead to the termination of the policy without eligibility for compensation.

9. What should I do if I subscribed but did not receive my Certificate of Insurance?

If you have subscribed but have not received your Certificate of Insurance, check your registered email or the official ILOE portal. If the issue persists, contact the relevant insurance provider or government service center for assistance.

10. Did you select a payment method but are unsure of how much is due?

Employees can check their due amount and payment status through the ILOE website, their employer, or the designated insurance provider’s portal. It is essential to ensure timely payments to avoid penalties or policy cancellations.

Final Thoughts

The Involuntary Loss of Employment (ILOE) Scheme is a crucial initiative aimed at providing financial stability to employees in the UAE. If you are a new hire, ensure that you subscribe to ILOE insurance at the start of your employment to avoid any coverage gaps. Ensuring compliance, timely premium payments, and understanding claim procedures can help employees benefit from this scheme during challenging times.

To know more, reach out to BVS Global for assistance.