Hundreds of young people in Wales will be given £1,600 a month pre-tax for two years as part of a new trial starting this Friday.
Up to 500 people who’ve just turned 18 and have been brought up in care will be eligible for the new Universal Basic Income (UBI) scheme.
The trial will see each person given £1,600 per calendar month (£1,280 after tax) with no restrictions on what the money can be spent on.
This works out at around £19,200 a year before tax.
Participants can choose whether to receive this payment either monthly or two times a month.
It will be paid to them by an external provider and will be paid to individuals, rather than households.
The Welsh government believes the cash offered is the highest amount provided on a basic income pilot anywhere in the world.
However, it admits some people will be better off on existing benefits such as Universal Credit.
For example, an unemployed 18-year-old who is paying £650 rent to a social housing provider would be around £400 better off than if they were on Universal Credit, reports Wales Online.
If you’re claiming benefits, you will need to make the DWP aware that you’re taking part in the scheme, as your benefits will need to be readjusted accordingly.
An exception to this will be Personal Independence Payments (PIP and those in supported housing will still be entitled to apply for Housing Benefit.
Similar schemes have been tested out in countries including Iran, India, Canada and parts of the United States.
The UBI scheme in Wales will run for three years, at a cost of around £20million.
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."
Who can get the money?
A person leaving care turning 18 years of age between July 1, 2022 and June 30, 2023
Someone who has been looked after by a council for a period of 13 weeks, or periods amounting in total to 13 weeks, which began after he or she reached 14 and ended after he or she reached 16
A person leaving care who is resident in Wales, or who is placed outside of Wales but is supported by a Welsh local authority’s social services department.
Participation in the pilot is voluntary. Those eligible will be contacted by social services or their young person’s advisor
You can also speak to your local council who will be able to help with an application form.
