Wales launches monthly £1,600 universal basic income payments for care leavers

Care leavers in Wales are getting ready to receive their first universal basic income payment of £1,600 a month as part of a new pilot.

The Welsh government will be putting the no-strings-attached money into the bank accounts of about 500 18-year-olds, to give young people who have been in the care system a “safety blanket” as they enter adulthood. 

Universal basic income is a regular payment given to everyone in society to create a minimum income floor, however the Welsh government have defined their pilot to those who have been in care, offering a yearly income similar to that of the living wage of £19,000.

Launching the pilot, Jane Hutt, Welsh minister for social justice, said the Welsh government had chosen care leavers to be the subjects of the UBI trial “because of the unique set of challenges they face”. 

Research has shown that when young people leave the care system, they are at greater risk of homelessness and mental health problems. 

“By supporting this group with the security of a regular, guaranteed and unconditional monthly income as they leave care, we hope we will allow them to consider their lives beyond day-to-day concerns and look to their future,” Hutt continued.

The Westminster government has described the model as expensive and that fear has been echoed by MPs in the Work and Pensions Committee who also said a universal basic income would “not target support at people who need it the most.

Hutt criticised Westminster for not collaborating on the trial. “The UK government has not cooperated with us as we would wish. We don’t want this basic payment to be taxed for example, and yet they’re taxing it,” she told The Big Issue. 

Nevertheless, she hopes Westminster will pay attention to the scheme, learn and benefit from it. 

Hutt did not address how the monthly £1,600 payments, paid for two years, would maintain their value in the face of rising cost of living and inflation, which hit 9 per cent in May, but emphasised that the scheme offers the “most generous” UBI allowance in the world.

A trial of UBI has been on the Welsh government’s agenda since First Minister Mark Drakeford committed to a trial following his first speech after being re-elected in May 2021.

Poverty academic Tom Pollard praised the Welsh government on the launch of the pilot, saying: “One of the best ways to mitigate the disadvantage certain groups face because of their current circumstances or past experiences is through unconditional cash transfers to provide the foundation for them to build a better future for themselves.”

“We don’t have a great start in life when we turn 18 and leave care – there’s very limited access to support when it comes to finances,” said Casey Armstrong, who has been part of a group campaigning for more support for people leaving care.