Wales to offer care leavers £1600 a month in new basic income trial

The Welsh Government has outlined plans to extend support for care leavers through a basic income pilot in Wales.

The pilot will see all young people leaving care after they turn 18 offered the chance to get £1,600 a month for two years.

It is estimated around 500 people will be eligible for the scheme, which will cost the Welsh Government £20 million over the next three years.

The Welsh Government has said £1600 a month represents the highest amount of money any trial has offered individuals in a basic income trial.

BI is a government programme in which everybody receives a set amount of money on a regular basis, regardless of their employment status.

It is a minimum payment, designed to meet basic needs, paid to everyone individually, unconditionally.

Ministers want to use the scheme to assess the impact receiving a basic income has on young people as they leave care, particularly those from disadvantaged backgrounds.

All young people leaving care who turn 18 during a 12 month period, across all local authority areas, will be offered the opportunity to take part in the pilot which will begin during the next financial year.

The Welsh Government involved care leavers directly in the development of the pilot as well as professionals in Local Authorities to establish a Technical Advisory Group, chaired by Professor Sir Michael Marmot.

Prof Sir Michael 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."

Outlining the reasoning behind the pilot, Minister for Social Justice Jane Hutt said: "Our basic income announcement today complements the Welsh Government's ambition to ensure the most vulnerable in our society are supported.

"We know 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.

"Care leavers have a right to be properly supported as they develop into independent young adults.

"It's also important to note that this policy is underpinned by the United Nations Convention on the Rights of the Child, emphasising our commitment to strengthening the rights of children and young people in Wales.

"Yet, too many young people leaving care continue to face significant barriers to achieving a successful transition into adulthood. Our basic income pilot is an exciting project to deliver financial stability for a generation of young people that need it most."

Ms Hutt added that the pilot will build on the existing support offered to looked after children in Wales and ensure young people who take part in the trial "get all the support they need to give them the best possible chance" of transitioning out of care.

"The pilot is specifically being designed to enable participants to receive more than just a basic transfer of cash; support will also be offered that is designed to build up their confidence to negotiate the world outside of care," she said.

A decision to go-ahead with the trial has been criticised by the Welsh Conservatives.

Welsh Conservative Shadow Minister for Social Partnership, Joel James MS, said: “Whilst I wholeheartedly support helping the poorest and most vulnerable in our country, the Labour Government is not even close to living in reality with this trial.

“Countless trials from across the globe have found basic income does not have the expected outcomes as it fails to incentivise work and proves time after time to be a waste of public money.

“If rolled-out across the board with every adult in Wales receiving £1,600 a month it would cost nearly £50 billion a year, and at the same time reward the wealthiest in society rather than helping those who need it most.

“Our NHS is at breaking point and our economy is in a fragile state, but instead of tackling those issues head-on, Labour are more interested in basic income – which will cost the country an absolute fortune.”

Welsh Liberal Democrat Leader Jane Dodds, who campaigned strongly in favour of the introduction of BI trials, said that the announcement is a "significant step in the right direction" but she would have liked to have seen the pilot expanded and offered to more people.

She said: "Although I would have liked to see a wider pilot, today's announcement is a significant step in the right direction and will be one of the most generous trials we've seen globally.

"However, I'd also like to see the Welsh Government outline how they intend to promote uptake of the scheme. We know that unfortunately care leavers have very low uptake of existing Government assistance schemes, so we have to ensure this opportunity is effectively promoted to those who qualify."