All young people leaving care in Wales will be offered £1,600 per month from when they turn 18, in a new trial of universal basic income (UBI) to begin next year.
The money will be given to participants unconditionally for two years. Making a yearly income of £19,200, officials have said it is the highest amount of money in a UBI scheme anywhere in the world.
The government says it will deliver financial stability to 500 young people leaving care, who are some of the most vulnerable in society. Jane Hutt, minister for social justice said the money would support them as “they develop into independent young adults.”
“We’re in the midst of a cost of living crisis and we’re determined to continually look at how best to support individuals in Wales who live in poverty,” she continued.
Welsh first minister, Labour’s Mark Drakeford, first announced a UBI would be trialled following his first speech after being re-elected in May 2021.
Ahead of the election, 25 cross-party Senedd members signed a pledge calling for a UBI to be trialled by the UBI Lab Network.
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While Plaid Cymru supported the pilot and called for it to be extended, The Welsh Conservatives has said it was a waste of money.
But former youth worker Alex Sommerville told BBC Radio Wales Breakfast that the scheme could discourage some young people from continuing with education.
“Some would still want to go for education or work, but there is a part of me thinking, if you’re getting that wage every month, why would you?” she asked.
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Somerville suggested the Welsh government use the money to hire youth workers on a living wage, “rather than just giving money to (care leavers) for a two-year period and expecting it to solve their problems.”
Future generations commissioner for Wales Sophie Howe highlighted that while the trial is not of a “full” universal basic income, she welcomed it as a first step towards “a full UBI programme which would provide that safety net for all and deliver a more equal, prosperous Wales.”
The plans differ from the concept of a universal basic income promoted by advocates around the world by targeting the income at one sector of society, and will be called a basic income pilot to reflect that.
“The challenges of the future are not going away, and must be met sooner rather than later. The cost-of-living crisis we are currently facing paints a grim picture, particularly for the most vulnerable in Welsh society, and we need to ensure people are given the help they need,” Howe told the Big Issue.
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