Universal basic income – Pros and cons – Economics Help

A citizens income, basic wage or Universal basic Income (UBI) is a concept of paying everyone in society a universal benefit regardless of income and circumstances.

The main advantage is that ensures a minimum standard of income for everyone without any costs and bureaucracy of means-tested benefits. Also, it avoids the disincentive to work that can occur with means-tested benefits. In times of crisis, a UBI can also provide a social safety net with minimum admin costs.

The disadvantage is that is an expensive undertaking to pay everyone in society a universal benefit and there is a concern it may encourage some to live on benefits without contributing anything useful to society.

A citizens income or universal basic income would primarily be paid for out of general taxation, though in some models it could involve redistributing profits from publicly owned industries.

Under the proposals of Citizens Trust income, benefits should be distributed according to age.0-24 year olds would receive 56.25 per week, 25-64 year olds would receive 71 per week and those 65 and over would receive 142.70 per week.

The citizens income would replace all benefits except disability and housing benefit. The total cost for 2012/13 would be 276n close to the existing annual welfare budget.

It would replace child benefit, income support, JSA, NI and state pensions. It also estimates savings of 10bn from administration of pensions and tax credits.

The interesting thing about a citizens income is that it gains support from both the left and right. The left supports its aim to create a more egalitarian society. There is support from the right who dislike the disincentives and bureaucracy of means tested benefits.

From a personal view, I like it because my lodger is on a zero-hour contract he often doesnt have money to pay rent, but he is not eligible for any benefits. A citizens income would be good to provide a minimum income guarantee.

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Universal basic income - Pros and cons - Economics Help