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Care leavers in Wales will be offered £1,600 a month under a three-year Welsh Government Basic Income trial.

All young people leaving care who turn 18 during a 12-month period, across all local authority areas, will be offered the chance to take part in the pilot. They will receive the unconditional money for two years.

The Welsh Government said the scheme will begin next financial year. It expects 500 people to be eligible and for it to cost around £20 million.

The aim of the trial is to work out whether a basic income would address issues such as poverty, unemployment, and health.

The money will be taxed and those receiving it will not be able to claim other state benefits such as Universal Credit.

The Welsh Government’s Minister for Social Justice Jane Hutt said: “The pilot will build on the existing support offered to looked after children in Wales and ensure young people who take part in this pilot get all the support they need to give them the best possible chance to make their way in life and the transition out of care better, easier and more positive.

“We are fully committed to supporting those living in poverty, ensuring they receive adequate financial support so that everyone in Wales can live happy and healthy lives.”

Pilot welcomed by UBI Wales

Th Welsh Government’s pilot scheme has been adapted from the concept of Universal Basic Income (UBI) – where everyone, regardless of their own particular circumstances, gets paid a set amount of money by the state on a regular basis.

Campaign group UBI Wales advocates such a policy.

Speaking to the Guardian, Lowri Walters, of UBI Lab Wales, said: “While this proposal is not for a location-based basic income pilot with a wide range of participants, it represents a huge step forward for the UBI movement and a first for the UK.

“This will be a sizeable basic income for young people who need financial support at an uncertain and difficult point in their lives, and we’re confident that, if done properly, this pilot will demonstrate that a basic income can transform the lives of care leavers as well as citizens across Wales.”

Plaid Cymru wants to see the pilot expanded, while the Welsh Conservatives have branded the scheme a “waste of money”.

The arguments for Universal Basic Income

According to the Senedd’s research and information service, the arguments for and against are broadly as follows:

• It is every citizen’s right – providing security from poverty and improving health and well-being.
• National income is distributed more equitably.
• Non-paid labour such as caring is rewarded.
• Workers get the freedom to choose what they do.
• Easier to understand than the current benefits system.

The arguments against Universal Basic Income

• It’s expensive – a full UBI in Wales could cost anywhere between £35 and 40 billion. The NHS budget in Wales is currently £8.3bn a year.
• It’s not targeted, so money goes to those who don’t need it.
• A huge shift from the current benefits system and one that could lead to a disincentive to work.

Tomorrow’s economy

There is also the threat (or opportunity?) of automation in the workplace. In the future, increasingly more jobs will be replaced by automation technology. According to analysis firm Oxford Economics, up to 20 million manufacturing jobs could be lost by 2030. And other industries are just as vulnerable – think about when you last used a self-service checkout at the supermarket.

Technology obviously brings a benefit of increased production – just look at the Industrial Revolution – but can we as a society reap those benefits by supporting those whose jobs have been replaced by automation? That’s where UBI could help.

Valuing the individual

But proponents of UBI argue that it is something more fundamental than pure economics.

Helena Hyatt helped establish UBI Lab Caerphilly.

Speaking to Caerphilly Observer in September last year, the New Tredegar resident said: “This is not just for people with low incomes. The aim of work is to survive – if you are lucky then you do something you enjoy – but people don’t work their best when they are at the other end of the whip.

“UBI could flip that. People could work 100 hours a week – but doing something they love to do. It is about changing the relationship with work so you can do what you want. So much work is already unpaid – from the caring to the arts.

“For me, that’s what UBI is about – breaking the link between the need to survive and human activity. It values each individual in a society, giving them back their agency.”