On Friday, a £20 million experiment providing a basic income to young people leaving care will commence in Wales.
The Welsh government will offer approximately 500 18-year-olds £19,200 per year before taxes beginning on July 1.
One careleaver described the money as a “security blanket,” while others believe it will assist the 18-year-olds to get off to a good start.
However, the Welsh Conservatives felt that the proposal could cause more difficulties than it solves.
Officials intend to analyze the program to determine if the money – roughly equivalent to the living wage – can assist the youth in adjusting to independent living.
Research indicates that care leavers are more likely to experience homelessness and mental health issues.
It is the most recent attempt to test the concept of unconditional financial support offered by some as an alternative to current welfare systems.
According to the Welsh government, the quantity of money supplied is the highest in the history of basic income pilot programs.
The income will be counted against benefits, and the young people who receive the money will be required to pay the basic tax rate, despite the Welsh government’s hopes that UK ministers would dismiss the initiative for both of these purposes.
It amounts to £1,600 per month, or £1,280 after taxes are deducted.
‘Safety blanket’
Chloe and Chelsea, who were formerly in foster care, will be among the beneficiaries.
Chloe, who has been in foster care since she was seven, intends to attend college. She stated that the plan will be “very beneficial.”
“I intend to enroll in a youth employment program. I believe this program will benefit me financially and enable me to do things I otherwise wouldn’t be able to.”
She stated that she was “very fortunate” to have the support of her foster family, “but I am aware that other care leavers do not have the familial support that I enjoy.”
The money will be used to pay for essentials such as food, but she also hopes to save some. “If I’m in college, it can assist me purchase materials for my study.”
She described the money as a “security blanket” and felt “extremely fortunate” to be participating.
What is a basic income for all?
Under a program, young care leavers will receive £1,600 each month.
Could this be the welfare system’s future?
Since she was approximately four years old, Chelsea has received attention.
She told that the majority of her basic income will go toward rent, as she will shortly be moving out. She too hopes to save a portion of it.
Chelsea planned to find employment while participating in the program: “I’m applying for anything at the moment.”
She stated that she “can’t wait” to be an adult and noted that the money would make a “huge impact.”
Rhian, a former care leaver who will not receive the money herself, was among those who assisted officials in creating the pilot.
She stopped receiving care throughout the pandemic.
She said, “About a year ago, I was rendered homeless and then obtained a place, but I couldn’t afford the rent or anything else, so I had to move out again.”
Rhian stated that care leavers are often limited in the quantity of support they may receive: “It is a major transition for us as care leavers to move from receiving a great deal of support to receiving only the bare minimum.
It will give 18-year-olds a taste of real-life and budgeting assistance,” the author says.
The program will operate until 2025, will cost approximately £20 million, and will be available to youth leaving foster care and turning 18 between 1 July and 30 June.
Mark Drakeford, the first minister of Wales, stated that the pilot may be used to argue for a “larger scale” system if the “promises outlined for basic income have been fulfilled in practice.”
He stated that care leavers who get the money will be able to make investments in their future, such as employment and education.
Mr. Drakeford guaranteed that care leavers on the program will have access to “coaching and guidance” for up to two years and stated that the program might save taxpayers money.
“We ultimately spent a fortune dealing with the ramifications of our failures,” he remarked.
“This is an attempt to transfer that money out of that part of the spectrum and put it up front, where we invest in the futures of these young people so that they may maximize their abilities.”
What is a minimum wage?
Around the world, basic income plans have been tested to determine whether they perform better than current welfare systems.
Supporters of the concept of “universal basic income” – in which everyone in a region receives a sum of money regardless of means – argue that it might help avoid “benefit traps” in which individuals lose money by working.
Some supporters believe that a basic income could give financial support if it becomes more difficult to obtain a job.
Kenya, Finland, and California have conducted modest experiments.
Welsh ministers announced plans to test the promise of a basic income in 2021, but they were criticized when it became clear that they will concentrate on care leavers rather than a larger population.
Officials want to determine if a basic income is effective for assisting young people exiting the foster care system, who frequently experience difficulties in securing a stable residence and a job.
When it unveiled its plans in February, the Welsh government ceased calling the program “universal.”
Beginning in the fall, researchers will be commissioned to examine the impact of the project by surveying and interviewing those participating.
Approximately 500 individuals are anticipated to be eligible, although participation will be optional, so participation may be lower.
Welfare is not devolved, and the Welsh Labour administration established the program without the backing of the United Kingdom government, which controls the majority of benefits in Wales.
Joel James, the spokesman for the Welsh Conservatives’ social partnership, stated, “It has been repeatedly demonstrated that so-called universal basic income does not work.
“We recognize that this is a vulnerable group that requires additional care, but this is the incorrect approach and could cause more problems than it solves.”
It’s typical of Labour, but handing out free money would not solve the problem quickly.
Luke Fletcher, the economics spokesman for Plaid Cymru, applauded the ideas.
“We anticipate the wonderful impact this will have on the lives of the participants, which I am confident it will,” he said.
“Before we begin this pilot, it is crucial that the Welsh government make clear how they will support the care leavers participating in this pilot, not only during the experiment but also after it concludes.”
