All young people leaving care after they turn 18 are to be offered the chance to receive £1,600 a month for two years as part of a basic income pilot scheme.

Around 500 people will be eligible for the scheme, thought to be the most generous of its kind in the world, which will cost the Welsh government £20m over the next three years.

It is set to be launched in the summer and has been designed following research of basic income schemes elsewhere in the world, including Finland.

How will it work?

• Those taking part will receive payments for up to two years from the month after their 18th birthday

• The money, which will amount to an income of about £19,000 a year, will be taxed

• This means those taking part in the pilot will not be able to claim all benefits they would be entitled to

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• The money will be given unconditionally and will not stop if participants find paid jobs

‘We’re in the midst of a cost of living crisis’

Ministers want to use the scheme to assess the impact receiving a basic income has on young people as they leave care, particularly those from disadvantaged backgrounds.

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Minister for Social Justice Jane Hutt said the aim of the scheme is to ensure young people who take part in the trial “get all the support they need to give them the best possible chance” of transitioning out of care.

This includes support to build up their confidence to negotiate the world outside of care.

“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,” she said.

“Care leavers have a right to be properly supported as they develop into independent young adults…yet, too many young people leaving care continue to face significant barriers to achieving a successful transition into adulthood.

“Our basic income pilot is an exciting project to deliver financial stability for a generation of young people that need it most.”

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