ITV News Reporter Rhys Williams explains what the basic income pilot means for young care leavers in Wales
For most of us turning 18 is an exciting prospect. But for those in the care system like Rhian Thomas, from Carmarthenshire, it can be a frightening one. When Rhian became an adult she struggled with the financial burden and ended up homeless, something she says happens to many leaving care.
This is why the Welsh government has chosen to use this vulnerable group as part of its Basic Income Pilot.
From the end of this week, more than 500 people leaving care in Wales will be offered £1,600 each month (before tax) for two years to support them as they make the transition to adult life. That’s £19,200 a year.
This means they will receive a lump sum from the state every month with no strings attached. No matter how rich or poor they are, or whether they’re working or unemployed. The pilot is intended to provide answers on whether a Universal Basic Income would improve lives. The idea is simple, the state provides every citizen a fixed income regardless of their means.
Proponents argue it would reduce poverty and be easier to navigate than means-tested benefits, but critics say it is extremely costly, poorly targeted and could disincentivise work. Basic Income pilots have been trialled on numerous occasions all over the world, the problem with many of them (including the Welsh government’s pilot) is that they have not been truly universal. This means it can be difficult to measure their success.
First Minister Mark Drakeford told ITV News that the Welsh government doesn’t have the means to roll out a truly Universal Basic Income, but argues that giving such a significant sum of money to an entire group of people will allow them to make clear conclusions on its benefits once the trial ends. He described the scheme as a “radical experiment” on giving care leavers the means and freedom to live healthy and fulfilling lives, rather than the state often acting as an “ambulance service” for those who struggle. There’s no doubt that paying care leavers a living wage is a bold step for the Welsh government, especially as so many in Wales are paid only the minimum wage.
The hope is that the trial will lead the participants to better jobs and healthier lives, with the fruits of this being felt in the long-term impact on health and social services as well as the wider economy.
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Critics, including the Welsh Conservatives, argue that this is the wrong way to help a vulnerable group of people and “giving out free money won’t be a quick fix”. They also have concerns about how care leavers will be supported once the scheme ends. One of the young care leavers who will get this grant told me she will use the money to help her pay for her living costs as she goes to university. Another said he wants to use it to rent his own place and pay for driving lessons. The immediate benefits to those who will get the money are clear - what’s not so clear is what this will tell us about the viability of a truly universal income.