Brazilian city pays third of its residents £25 per month in one of world’s largest universal basic income schemes

There are no conditions on how residents can spend their money

A woman uses her ‘Mumbuca’ card at pharmacy in Marica, Brazil (AFP/Getty)

A city in Brazil is preparing to pay a basic income to around 50,000 residents in one of the largest trials of such a scheme in the world.

The policy will see around one-third of the city’s residents being given 130 reais (£25) each per month, without any conditions about how they can spend the money.

The money is distributed in “Mumbuca” – the city’s local currency which is not accepted in the rest of Brazil.

“For us, this is a critical public policy issue that is in a constant state of development,” Fabiano Horta, the mayor of Marica, said.

“It was created as a social currency to supplement income, and today it has already advanced to become a basic income for Marica’s citizens.

“We are in a good moment to undertake these studies and understand how the Mumbuca currency is transforming the social context of the city.”

In the first round of payments, around 27,000 residents will be given the basic income this month, Business Insider reports.

They will receive the money on a pre-loaded card, or through a mobile phone app. There is no option to receive it in cash.

To be eligible for the stipend, residents must have lived in the city for at least three years and must earn below a certain amount, pegged at three times Brazil’s monthly salary.

The scheme will be evaluated by researchers at the Jain Family Institute, a New York-based social research organisation.

Michael Stynes, CEO of the institute, said: “This is an exceptionally rare and exciting opportunity to study a cash transfer policy at a large scale.

“We’re thrilled to work with an incredibly innovative government and researchers from UFF [the Universidade Federal Fluminense] who are taking bold steps towards creating a better life for Marica’s citizens.

“We are united in our belief that this policy, and the evidence it creates, will be a touchstone in discussions of [universal basic income] throughout Brazil and the world.”

Similar basic income schemes have recently been run in Stockton in California, Ontario in Canada and Finland.

Earlier this year, the Finnish experiment ended in failure when it did not help the unemployed rejoin the workforce.

The two-year test saw 2,000 randomly selected citizens who did not have jobs given €560 (£480) a month.

Researchers found it did not encourage recipients to seek work compared to a control group who did not receive the money, though they did report being happier and healthier.

A poll conducted last year found 40 per cent of British people supported the concept of a universal basic income and would welcome experiments in their local area.