On Wednesday, February 16th, 2022, Jane Hutt, the Minister for Social Justice, announced that a pilot of Basic Income will be launched in Wales in the 2022/2023 financial year. This program is focused on those leaving care at age 18. The goal of this pilot is to increase the support that is available to young adults and examine the impact that these financial resources have on young people leaving care. All young people leaving care who turn 18 years old within the initial 12-month period of the program will be considered eligible for the basic income pilot program across all local authority areas in Wales.
Those leaving care will receive a stipend of £1,600 a month for up to two years, with the first payment arriving one month after their 18th birthday. This amount, totaling £19,200 before tax annually, will be considered a source of income and taxed accordingly. These funds are given unconditionally, and participants will still be eligible for this funding even after they become employed. Officials say this amount is equivalent to the real living wage in the United Kingdom, and will help to provide a safety net for those leaving care who may not have support from their families.
The pilot will begin distributing funds in the summer of 2022, and it is estimated that over 500 young people will be eligible. This would cost up to £20 million over three years. Other forms of support will be offered to participants in addition to the monthly cash award of £1,600, such as financial wellbeing training and signposting to support services. This program will help experts determine the benefits of basic income, which include improving financial wellbeing and addressing poverty. This pilot will allow ministers to examine the effects of basic income programs and help those leaving care transition into independent adults by delivering financial stability.
A Technical Advisory Board has been assembled to monitor the progress and evaluate outcomes from this basic income program, chaired by Professor Sir Michael Marmot. In addition, an external reference group will be involved with this pilot to support the participants and provide representation on their behalf.
More information will be provided in the coming months.
Maria Matarazzo, April 11. 2022
