From July 1, more than 500 people leaving care in Wales will be offered £1,600 each month for two years to support them move into adult life.
The Welsh Government has launched its Basic Income pilot scheme aimed at helping young people as they leave the care system.
From July 1, more than 500 people leaving care in Wales will be offered £1,600 each month before tax for two years to support them as they make the transition to adult life.
The £20 million pilot, which will run for three years, will be evaluated to carefully examine its effect on the lives of those involved.
First Minister Mark Drakeford, who launched the scheme, 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.”
Those taking part in the pilot will also receive individual advice and support to help them manage their finances and develop their financial and budgeting skills.
Minister for Social Justice Jane Hutt added: “We’re in the midst of a cost-of-living crisis like no other and we therefore need new ways of supporting people who are most in need.
“Our Basic Income pilot is an incredibly exciting project giving financial stability to a generation of young people.
“Too many people leaving care face huge barriers to achieving their hopes and ambitions – such as problems with getting a safe and stable home, to securing a job and building a fulfilling career.
“This scheme will help people live a life free of such barriers and limitations.
“We will carefully evaluate the lessons learnt from the pilot. Listening to everyone who takes part will be crucial in determining the success of this globally ambitious project.
“We will examine whether Basic Income is an efficient way to support society’s most vulnerable and not only benefit the individual, but wider society too.”
The pilot will be limited to care leavers who reach their 18th birthday between July 1 2022 and June 30 2023.
It will run for three years with each person taking part receiving the basic income payment for 24 months from the month after their 18th birthday.
And participants can choose whether to receive the money monthly or fortnightly.
The pilot was criticised by the Welsh Conservatives, who said it was “free money” offering no long-term solutions.
Joel James, shadow minister for social partnership, said: “It’s been proven time and again that so-called Universal Basic Income doesn’t work.
“Look at Finland, who ditched their scheme after two years in favour of a new scheme that encouraged people to actually take up employment or training.
“We recognise that this is a vulnerable group and they need extra support, but this is completely the wrong way to go about it and could well create more problems than it solves.
“It’s typical Labour, but it’s obvious that giving out free money won’t be a quick fix.”