Universal basic income: what is the benefit and how does it work?

A UNIVERSAL basic income will be given to some young people in Wales as part of a new pilot scheme.

They will get a guaranteed monthly income of £1,600 to help them afford essentials like food and bills.

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The idea of a universal basic income (UBI) is that it provides every person with a basic amount of money to live on, regardless of their circumstances.

The trial by the Welsh government won’t go quite that far, but it will give the cash to children leaving care when they turn 18.

They will get £1,600 a month for 24 months from next year when they legally become an adult and it’s expected that around 500 will be part of the trial.

What is a universal basic income?

Universal Basic Income (UBI) is a proposed blanket handout paid to all.

This is regardless of their age or whether they were in or out of work covering basic food and clothing costs.

It would be different to the current welfare system, which offers benefits like Universal Credit based on circumstances, including how much you earn and who you live with among other things.

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Exactly how a UBI works, like how much you get, would depend on how such a scheme was designed.

There is no single, universally accepted model of how UBI could work in practice.

Some believe it should replace the current benefits system altogether, while others believe it should include some parts, so a basic amount for all and then extra that is means-tested.

Who gets universal basic income?

Currently there are no UBI schemes other than the pilot in Wales.

It is also arguably not a UBI in the truest sense, as it only targets a certain group of people, in this case care leavers.

The Labour party under previous leader Jeremy Corbyn signalled an interest in exploring UBI and the Green Party has called for a UBI.

The Scottish government has looked at it too and is planning a minimum income guarantee (MIG) which is slightly different from UBI, as it would target those on lower incomes rather than being universal.

Proponents of UBI say that it will tackle the issue of poverty

But giving everyone a cash handout would cost a lot.

A report last year published by the cross-party work and pensions committee estimates that depending on the model for UBI, it could cost anywhere between £140 billion and £427 billion per year.

To put that in context, the Department of Work and Pensions (DWP) total expenditure for 2019–20 was £199.1billion.

In practice, there have only been a handful of trials of universal basic income, including Finland, the Netherlands and Spain recently, and no country has a full UBI in place.

This post first appeared on thesun.co.uk