GENEVA - Long-term South Asian migrant workers in the United Arab Emirates face growing financial precarity and residential instability at retirement due to a systemic reliance on lump-sum gratuity payouts.
Published by the International Labour Organization’s STREAM Programme, the research paper by Dr. İdil Akıncı warns that existing social protection mechanisms fail to accommodate multi-generational non-national populations.
Although foreign residents account for nearly 90 percent of the UAE's total population and nearly 40 percent of residents aged 65 and older, most remain excluded from public pension systems.
Approximately 65 percent of non-national workers rely primarily on traditional end-of-service indemnity payouts. These lump-sum gratuities typically replace only 10 to 13 percent of pre-retirement earnings, well below the 40 percent benchmark set by international social security standards.
While the UAE Ministry of Human Resources and Emiratisation introduced a voluntary alternative end-of-service benefits scheme in 2023, enrolment remains optional for employers, limiting its initial reach.
Policy analysts estimate that making funded workplace savings compulsory could unlock up to $100 billion in capital, equivalent to nearly 20 percent of the UAE's gross domestic product. Without universal coverage, lower- and middle-income families struggle to manage rising living expenses and housing costs after active employment ends.
Healthcare affordability represents another major hurdle, as residency renewal requires mandatory medical insurance once employer coverage terminates. Annual health insurance premiums for residents over 60 frequently surge, with single medical procedures reported to escalate annual policy costs from 30,000 dirhams to more than 90,000 dirhams.
Consequently, many older workers extend their employment solely to retain corporate healthcare coverage.
“My father still works, mainly to make sure he has his residency and, most importantly, his healthcare sorted,” said the son of a 70-year-old Indian worker in Dubai, as quoted on ILO’s report.
“Healthcare is so expensive after turning 60, and many companies don't want to insure older people unless you pay a premium. Add to that any existing health issues like my dad has... If I sponsor him, it will be very difficult and expensive to get a policy.”
The pressure is particularly acute for the region’s 9 million Indian nationals, nearly half of whom reside in the UAE. In the absence of bilateral social security agreements between India and Gulf Cooperation Council states, accrued benefits cannot be transferred into origin-country mechanisms like India's National Pension System.
While options detailed on the official Government Platform of the UAE provide non-employment residency pathways, high income and asset thresholds leave adult children serving as primary financial safety nets.
To resolve these structural gaps, the report recommends establishing mandatory contributory retirement funds, expanding affordable retiree health plans, and offering lower-threshold visas for residents with 20 or more years of service.
Beyond financial constraints, returning to origin countries carries immense personal strain for residents who have spent decades abroad. “The problem is my mum is very much addicted to Dubai, and so is my dad," said a UAE-born Indian national reflecting on her parents' retirement, as quoted on ILO’s report.