Young adults will be given £1,600 a month each for two years in a major trial of Basic Income.
The radical idea gives people a set payment to replace the benefit system and prepare for an age of robots taking over jobs.
Under ‘Universal’ Basic Income (UBI) this money could even go to all adults, rich or poor, working or not.
However, the pilot announced today will apply only to about 500 young adults who have just left the care system in Wales.
The Welsh Government said young people leaving care who turn 18, across all council areas, will be offered the chance to receive £1,600 a month for two years.
The trial will begin by April 2023 and the window to join will be open for one year. That means around 500 people are expected to become eligible.
They will also be given “financial well-being training” to “build up their confidence” for a life outside care.
It is said to be the highest amount offered on a Basic Income scheme anywhere in the world. It will be taxed like income from a job, and replace most benefits.
Tory ministers are opposed to a wider UBI, and last year the cross-party Work and Pensions Committee said "we are not convinced" it would be the right way forward for the UK.
But the Labour-run Welsh government said it would help care leavers transition into everyday adult life - as inflation hit 5.5% today but benefits rise by just 3.1% in April.
Minister for Social Justice Jane Hutt said: “We know we’re in the midst of a cost of living crisis and we’re determined to continually look at how best to support individuals in Wales who live in poverty.
“Care leavers have a right to be properly supported as they develop into independent young adults.
“It’s also important to note that this policy is underpinned by the United Nations Convention on the Rights of the Child (UNCRC), emphasising our commitment to strengthening the rights of children and young people in Wales.”
The Welsh Government’s Technical Advisory Group on Basic Income, chaired by Professor Sir Michael Marmot said: “We may have differing opinions on how a basic income can work on a wider scale.
"[But] we can all agree that any scheme aimed at helping a particularly vulnerable group should be welcomed and intend to provide Welsh Government with the support it needs in making this a success.”
Labour's Shadow Work and Pensions Secretary said in September that while he was “interested” in UBI, it is not yet “in any way feasible”.
Jonathan Reynolds, who previously offered support for the idea, said: “I’ll always engage in the debate, but there’s obviously not a plan I can look at to implement and that’s not the conversation.
“It’s how you take the best of that political debate and use it to build a genuinely real world, effective system for the future.”
