The Welsh Government is to pilot a scheme offering every 18-year-old leaving care £1,600 a month.
It is expected that 500 people will be eligible to join the scheme, under the Welsh government’s basic income pilot. It is being launched this year and is estimated to cost up to £20 million over three years.
Social Justice Minister Jane Hutt said: “Care leavers have a right to be properly supported as they develop into independent young adults.
“Our basic income pilot is an exciting project to deliver financial stability for a generation of young people that need it most.”
She added that “too many young people leaving care continue to face significant barriers to achieving a successful transition into adulthood.”
It will work with a technical advisory group led by Prof Sir Michael Marmot.
A waste of money?
The scheme has already come under criticism in Wales as the £1,600 a month is expected to be counted as income by the UK Government and therefore taxed. This means that it would affect someone’s eligibility for benefits.
However, the Welsh Government has said that it will be unconditional and not withdrawn if participants get a job.
The Welsh Conservatives said it was a waste of money. The Conservatives said Labour ministers were “not even close to living in reality” with this idea.
Speaking to the BBC, Welsh Conservative spokesman for social partnership Joel James said: “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.
“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 – that will cost the country an absolute fortune.”
Could the scheme be expanded?
Welcoming the scheme, Plaid Cymru wants the pilot to be expanded.
Plaid Cymru’s economy spokesman Luke Fletcher said: “This pilot is a step in the right direction for the Welsh government, but it’s really important that it has the structure around it to enable it to meet the ambition of addressing poverty and unemployment, as well as improving health and financial wellbeing.
“Poverty is as multidimensional as it is widespread, and there’s no reason that this pilot cannot be expanded to a wider population from the start.”
