Wales trials paying universal basic income of £19,200 a year

Scheme’s rate is thought to be the highest of its kind

The basic income will give care leavers a stable income for two years from when they turn 18 (Getty Images/iStockphoto)

The Welsh government’s trial of a universal basic income will pay around 500 people £1,600 a month, the devolved administration has announced.

Under the pilot policy some vulnerable young people will be paid £19,200 a year for 24 months from their 18th birthday – the highest rate of any large-scale pilot.

The scheme will be open to all young people leaving care, and extend to double the number of people that had previously been planned.

Some members of the Welsh parliament last month expressed concerns that the pilot, originally expected to cover just 250 people, might be too small to be a useful study. But unveiling details on Tuesday evening Welsh ministers said the programme is now likely to be taken up by around 500 care leavers. The experiment is planned to last for a “minimum” of three years.

Under a universal basic income everyone would be paid an unconditional flat amount of cash by the government to help cover living costs.

The idea has been suggested as a way of giving people more economic security and opportunities and has been trialled in countries including Finland and the Netherlands.

The Welsh Labour government wants to test whether the policy lives up to claimed benefits such as cutting poverty and unemployment and improving health and financial wellbeing, so it is piloting it with a smaller group.

Minister for social justice Jane Hutt said the pilot was “an exciting project to deliver financial stability for a generation of young people that need it most”.

"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," she said.

"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.”

Members of the Welsh Parliament previously said 250 people was not enough and called for the project to be diversified across more walks of life and demographics to give more useful data.

"A basic income pilot for care leavers – as currently proposed by the Welsh government – will provide valuable feedback on the potential of such a scheme to improve the support to a group which faces significant challenges," the committee said in January.

"However, a three-year pilot of only 250 people will offer limited information. And applying a basic income only to care leavers, will tell us little about universal basic income."

The scheme will still be limited to care leavers but is now expected to cover more people. Officials say the increase from 250 to 500 is due to the size of the cohort of 18 years olds leaving care for the 2022/2023 financial year, when the scheme will begin.

Welsh Government’s Technical Advisory Group on Basic Income, chaired by Professor Sir Michael Marmot said: “The Technical Advisory Group for the Welsh Basic Income Pilot want to put on record our support for this policy.

"Whilst we may have differing opinions on how a basic income can work on a wider scale, we can all agree that any scheme aimed at helping a particularly vulnerable group should be welcomed and intend to provide Welsh Government with the support it needs in making this a success.”