Thursday, February 7, 2013

Housing allowance: added benefit or hidden burden?

Image info:
Flying House Wallpaper
by FelisKachu
One of the perks of moving to the UAE is that most companies will offer their employees a housing allowance - a monthly budget that is used toward a property rental.
Needless to say this added benefit is actually one of the main reasons people decide to relocate to the country. After all, it has a huge impact on the household economy.
Lately, however, some Abu Dhabi employees are asking themselves if this is really an added benefit or a hidden burden…
Last September, the Secretariat General of the Executive Council published a directive stating that all employees of Abu Dhabi Government departments and agencies must either live in the Emirate or lose their housing allowance.
This means that thousands of employees currently living in Dubai, for example, will have to return to Abu Dhabi over the course of this year.
The problem?
Well, first off, many employees are resentful since it is not stated in their contracts that the housing allowance should be used strictly for rent in Abu Dhabi.
Secondly, the new rule will make life harder for several married couples where each spouse works in a different Emirate. If one part has to quit his job, this will certainly have a negative impact on the monthly income.
In addition, many employees decided to live in Dubai and face the every day commute because the neighboring Emirate gave them more housing and schooling options to choose from. And we all know that, usually, more options mean lower price.
Ultimately, of course, as government workers relocate from Dubai, the rent in Abu Dhabi, which was going down, has shot up once again. In some areas, rent has risen by as much as 25% over the past six months!
The Government says this new rule was put in place to ensure the safety of its employees who are supposedly tired from the long commutes and the risks involved in it. According to official figures released by Abu Dhabi’s Department of Transport, almost 11,000 vehicles enter the capital between 6am and 7am on a working day.
Whatever the reason, the decision has certainly received mixed reactions from experts and residents.
Were you impacted by this directive? What is your take on it?

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