Abu Dhabi, 5th September 2024: A total of 140,880 Emiratis are currently registered and contribute on monthly basis with the General Pension and Social Security Authority (GPSSA) from across 18,009 UAE-based entities, out of which 35,619 work in the federal government; 35,160 in the local government and 70,101 in the private sector.
In addition to those numbers, a total number of 37 self-employed entities are registered with the GPSSA, while 146 Emiratis employed in GCC countries and 5,843 GCC nationals working in the UAE are registered under GPSSA’s Unified Extension Protection System.
In an exclusive interview with Gulf News, the GPSSA clarifies ways by which the laws cater to different categories and customers, including Federal Law No. 7 of 1999 regarding pension and social security and its amendments and Federal Law No. (57) of 2023 regarding pension and social security and its amendments, which both cater to Emirati employees working in federal, government and private sectors across the UAE, with exception to government and private sectors in Abu Dhabi and the government sector in Sharjah.
Terms and conditions
It is important to note that GPSSA’s laws set clear and transparent eligibility criterions for different categories in order to have them register and contribute on monthly basis, some of which includes the fact that both the 1999 and 2023 federal pension and social security laws require contributors to be an Emirati national aged between 18 to 60 and medically fit to work upon employment based on an authorized medical report. Once all the above conditions are met, the individual must register and contribute with the GPSSA within the first month of joining a new entity.
Once an employee registers and obtains an insurance number, he/she must ensure their entity contributes on their behalf a particular percentage each month in a timely and systematic manner.
The UAE’s federal pension and social security laws explained
It is of paramount importance to be aware of the differences between Federal Law No. 7 of 1999 and Federal Law No. 57 of 2023 regarding pension and social security and its amendments.
The 1999 law defines the employer in the government sector as federal government authorities, public bodies, public institutions, public companies and banks in which the federal government contributes, in addition to local government authorities that employ Emiratis. The monthly contribution rate as per Federal Law No. 7 of 1999 for both government and private sectors is 20% out of which the insured contributes 5% and government sector employer pays 15%, whereas a private sector employee contributes 5% and the private sector pays 12.5%, with the rest of the 2.5% contributed by the UAE government as support to the private sector.
In addition to the above employers, the Federal Law No. 57 of 2023 further includes entities that undergo UAE-based regional, international and foreign policy missions. The monthly contribution rate as per Federal Law No. 57 of 2023 for both government and private sectors is 26% out of which the insured contributes 11% and government sector employer pays 15%, whereas a private sector employee contributes 11% and the private sector pays 15%, unless the employees contribution account salary is less than AED 20,000 which is when the UAE government supports the entity by paying a 2.5% share out of the required 15% contribution value.
The Unified Extension Protection System
GPSSA is considered the implementing body for the unified extension protection system in the UAE. The leading GCC system provides insurance services beyond the country’s border, whereby GCC citizens working in any of the GCC countries are subject to the insurance scheme and are entitled to receive a retirement pension or an end-of-service gratuity in accordance to the pension law regulations in their respective home country.
To be eligible to participate in the extension protection system an employee must possess a GCC nationality and work for an employer subject to the provisions of the civil retirement law in his/her own country. The system covers Emirati employees working in any of the GCC countries in addition to GCC citizens working in the UAE, whether in the federal, government, private sectors, free zones and the hotel and tourism sector. In the event of changes in any of the above conditions, the employee’s participation in the system is immediately suspended.
Self-employed individuals
Ministerial Resolution No. 19 of 2013 specify pension and social security benefits for self-employed individuals, whether they are entrepreneurs or freelancers who undertake commercial, industrial or agricultural activities.
In order to register with the GPSSA, the self-employed individual must fulfill the criteria’s required, i.e. he/she must be aged 21 to 55, he/she must register in the commercial registry or any other official registry and submit proof that a license or permit for the business has been issued by a competent authority.
Emiratis employed in a self-employed entity must follow the procedures detailed in the federal pension and social security laws 1999 and 2023, as well as in the unified extension protection system for GCC nationals.