Wales basic income pilot scheme will see young care leavers offered over £19,000

The Welsh Government will launch its basic income pilot scheme this week which will see young people leaving care offered a guaranteed income of £1,600 each month, before tax.

From Friday, 1 July, more than 500 people leaving care in Wales will be offered the basic income for two years to support them as they make the transition to adult life.

The Welsh Government hope the pilot will set care leavers on a path to live healthy, happy and fulfilling lives.

The Welsh Conservatives have said the scheme will add another burden to local authorities.

The £20 million pilot, which will run for three years, will be evaluated to “carefully examine its effect on the lives of those involved.”

The Welsh Government has said those taking part in the pilot will also receive individual advice and support to help them manage their finances and develop their financial and budgeting skills.

Local authorities will play a key role in supporting them throughout the pilot.

Care Cymru will also work with the young people to give them advice on wellbeing, education, employment and help them plan their future after the pilot.

First Minister Mark Drakeford said: “We want all our young people to have the best possible chance in life and fulfil their full potential.

“The state is the guardian of people leaving care and so has a real obligation to support them as they start their adult life.

“Our focus will be on opening up their world to all its possibilities and create an independence from services as their lives develop.

“Many of those involved in this pilot don’t have the support lots of people – myself included – have been lucky enough to enjoy as we started out on our path to adulthood.

“Our radical initiative will not only improve the lives of those taking part in the pilot, but will reap rewards for the rest of Welsh society.

“If we succeed in what we are attempting today this will be just the first step in what could be a journey that benefits generations to come.”

The Welsh Conservatives have said the Labour Government is giving out free money with no strings attached.

Commenting, Welsh Conservative Shadow Minister for Social Partnership, Joel James MS, said: “It’s been proven time and again that so-called universal basic income doesn’t work.

“Look at Finland, who ditched their scheme after two years in favour of new scheme that encouraged people to actually take up employment or training.

“We recognise that this is a vulnerable group, and they need extra support – but this is completely the wrong way to go about it and could well create more problems than it solves.

“It’s typical Labour – but it’s obvious that giving out free money won’t be a quick fix.”

Tiff Evans of Voices from Care Cymru, speaking on behalf of young people who have experienced care, said: “This is a brilliant opportunity for care leavers in Wales.

“It is good to see that care leavers in Wales are being thought of and Welsh Government are providing this opportunity for them as young people to become responsible, control some parts of their lives and have a chance to thrive and be financially independent.

“We thank Welsh Government for investing in them and their future and we look forward to other changes and developments for care experienced young people in Wales in order for them to reach life aspirations.”

How it will work:

• The total basic income support will be £1,600 per calendar month (pre-tax) for a period of 24 months, starting on the first day of the calendar month immediately following the calendar month in which the recipient’s 18th birthday falls. After tax, the amount each recipient will receive per month is £1,280.
• The basic income pilot cohort will be limited to care leavers who reach their 18^th birthday between 1 July 2022 and 30 June 2023.
• The pilot will run for three years with each member of the cohort receiving a basic income payment of £1600 per month (before tax) for a duration of 24 months from the month after their 18th birthday.
• Participants in the pilot can choose whether to receive this payment either monthly or two times a month. It will be paid to them by an external provider.
• The payment will be taxed at the basic rate of tax at source.
• Participation in the pilot is voluntary. Eligible young people will be supported by their local authority and provided with advice funded by the single advice fund, to decide if taking part in the pilot is the right choice for them.
• Welsh local authorities will play a critical role in delivering the basic income pilot. They will act as a first point of contact for the care leavers and will be responsible for guiding the young people in their care through the pilot. They will also provide vital feedback to Welsh Government on the pilot as it is rolled out.
• 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.