Care leavers in Wales to be given unconditional monthly basic income of £1600

The Welsh Government has announced a pilot of a basic income scheme for care leavers where they will receive payments delivered unconditionally without means test or work requirement.

It says the pilot will enhance the support available to young people as they leave care and assess the impact that has on them.

The scheme will provide a test for the stated benefits of basic income, such as addressing poverty and unemployment and improving health and financial wellbeing.

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 this pilot. The pilot will begin from April with the Welsh Government saying it anticipates more than 500 young people will be eligible to join the scheme.

The pilot will run for a minimum of three years with each member of the cohort receiving a basic income payment of £1600 per month for a duration of 24 months from the month after their 18th birthday.

The Welsh Government involved care leavers directly in the development of the pilot as well as working with professionals in Local Authorities and have also established a Technical Advisory Group, chaired by Professor Sir Michael Marmot, bringing together experts in basic income and support for care leavers to inform the development and evaluation of the pilot.

Outlining the reasoning behind the pilot, Minister for Social Justice Jane Hutt said that being in the midst of a cost of living crisis meant the Government must 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 (UNCRC), emphasising our commitment to strengthening the rights of children and young people in Wales.”

“Too many young people leaving care continue to face significant barriers to achieving a successful transition into adulthood,” Hutt said, adding that the Basic Income would deliver financial stability for a generation of young people that need it most.

“The pilot will build on the existing support offered to looked after children in Wales and ensure young people who take part in this pilot get all the support they need to give them the best possible chance to make their way in life and the transition out of care better, easier and more positive.

Catriona Williams OBE, Chair of Voices from Care Cymru, welcomed the announcement.

“It is critical for it to succeed that the voices of care experienced children and young people are heard on decisions like this that directly affect their lives. We look forward to working with the Welsh Government to help ensure that the pilot is successful and delivers the best possible outcomes for care experienced young people in Wales so they can thrive.”

A basic income (sometimes referred to as a universal basic income or UBI) is usually defined as a periodic cash payment delivered unconditionally without means test or work requirement. Poverty charity the Joseph Rowntree Foundation says that, in theory, UBI could be designed to “reduce poverty, improve income security and boost wellbeing”, adding however that it could be “expensive and challenging to introduce.”

Critics of the theory of basic income say it disincentivises working and is a waste of public money. Speaking to BBC Radio Wales, former youth worker Alex Sommerville, said she was “worried about giving young people all of that money and expecting them to know how to spend it in the best way for themselves."

However, the Welsh Government’s Technical Advisory Group on Basic Income said it wanted to “put on the record” its support for the pilot.

Professor Sir Michael Marmot, Chair of the group, said: “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.”

“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.

“This extra support will include, for instance, financial well-being training and signposting to all available support provided by Welsh Government and other partner organisations.