‘A welcome step’: Ireland’s first basic income scheme on the way

How would you like to get €250 into your bank account each week, no questions asked? Over the coming months, as many as 2,000 artists and creative workers will benefit from just this as part of Ireland's first basic income scheme which will shortly be rolled out across the State.

But how will the scheme work? What will the benefits be? And, more significantly perhaps, are we likely to see the pilot scheme extended to a universal basic income in Ireland at some point in the future?

What is a basic income?

In simple terms, a universal basic income is an income provided without conditions to every adult and child. It has three key characteristics: it is sufficient; it is unconditional; and it is universal in that it guarantees a standard amount to every citizen, regardless of need.

Like child benefit, such an income would be automatic and would not be means tested.

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As Social Justice Ireland notes, “basic income is an enabler. It allows everyone the freedom to choose how to spend their time and how much of that time they want to spend in paid employment, caring, volunteering, accessing education, engaging in leisure activities and so on.”

Colette Bennett, an economic and social analyst with Social Justice Ireland, stresses that it's not just a benefit for those on low incomes – it's of benefit to all, including those who are not employed but work in the community or the home.

“Its purpose is to give an income to all, so it’s a much broader and more equitable policy than if it was just confined to those on low incomes,” she says.

A regular criticism of such schemes is that, by rewarding people for no specific purpose, you risk disincentivising people from participating in the workforce.

"It just doesn't stack up at all," says Bennett, pointing to pilot schemes in Finland and Canada where studies have shown an improvement in mental health and wellbeing, and also showed an increase in entrepreneurial activities.

“There’s no disincentive to work, as there are with many social welfare payments,” says Bennett, pointing to benefits such as the working family payment.

Other pilot schemes

Ireland is not the first country to embark on a trial basic income scheme. San Francisco in the US has also implemented a pilot basic income scheme which has seen more than 100 local artists get a $1,000 (€881) monthly stipend as part of the the city’s Economic Recovery Task Force.

More recently the midwest city of Chicago said it would give $500 a month to 5,000 low-income households for a year, in a pilot programme with a total budget of some $31.5 million, while in South Korea, presidential candidate Lee Jae-myung has committed to giving 1 million won (€738) to every citizen and 2 million won (€1,477) to 19- to 29-year-olds, with a start date of 2024.

Meanwhile in Wales, every 18-year-old leaving care is set to be offered £1,600 (€1,919) a month for two years under a pilot scheme.

What is the Irish pilot scheme?

In January, Catherine Martin, Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, announced Ireland’s first basic income scheme, noting that it would open for applications later this year.

The scheme, which will pay about 2,000 artists roughly €1,000 every month, is due to run for three years.

It has been broadly welcomed by the arts sector.

There may be a ceiling on the amount of income someone can earn and remain eligible for the scheme

"I think that it's an excellent initiative," says Noel Kelly, chief executive of Visual Artists Ireland, noting that many visual artists live under the poverty threshold – and not just due to the pandemic.

“This is something we’ve been talking about for quite some time,” he says. “I don’t think it’s in any way a knee-jerk reaction to Covid.”

While it is not yet clear what rate of basic income will apply, the scheme has a budget of €25 million this year. On the basis that about 2,000 artists are expected to benefit, this suggests an income of about €1,041 per artist per month.

The Arts and Culture Recovery Task Force has recommended a higher rate, of about €10.50 an hour, to cover an average working week of about 33.1 hours. This would indicate a basic income of about €348 a week, or about €1,400 a month.

Describing it as a “once-in-a-generation policy intervention”, the Minister expects the scheme to “redraw the landscape for the arts for hopefully many years to come”.

The goal of the scheme is to provide financial support for practicing artists “to recognise the value of unpaid work in creative practice and for arts workers who make a key contribution to the creative production process”.

It also aims to reduce reliance on the social welfare system by the arts sector.

Unsurprisingly, artists were hit more than most by the pandemic, but low earnings are not unique to the past two years. Theatre Forum’s payscales survey, for example, indicates that, in 2019, 91 per cent of artists, makers and creative practitioners earned less than the national average earnings for all employees of €40,283, while almost a quarter earned less than the national minimum wage of €9.80 per hour.

Who will benefit?

As the scheme remains to be finalised, it is not yet exactly clear who will qualify but, according to a spokeswoman for the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media, it will be open to practising and developing artists and creative arts workers. This is likely to encompass a range of arts activities, potentially including visual arts, theatre, literature, music, dance, opera, film, circus and architecture.

“It will be a non-competitive process; therefore, once a person satisfies the eligibility criteria, they will be included in a randomised selection process,” she says, noting that the eligibility criteria will be published in the coming weeks.

It is expected that a means test won’t apply; however, there may be a ceiling on the amount of income someone can earn and remain eligible for the scheme.

Once approved, successful applicants won’t be precluded from earning further income; according to the spokeswoman, recipients will be able to work while in receipt of the grant.

Will it be taxed?

According to the department, “like all income, the grant payment will be reckonable for both income tax and social welfare means test purposes.” However, the level of tax paid and/or the impact on a social welfare payment will depend on each person’s individual circumstances, so those with low incomes may not be impacted.

Eligibility should also be retained for other social welfare entitlements, such as rent supplement and back-to-school allowance, although this might depend on the approach taken by the Department of Social Protection and how the basic income affects a means test.

Will we see a universal scheme?

While the scheme for artists may be the first such basic income scheme in Ireland, it may not be the last. The Programme for Government has a commitment to introduce a pilot universal basic income scheme in the lifetime of the Government, and the Low Pay Commission is currently examining this proposal.

A universal scheme would be extremely expensive; the artists' scheme is set to cost €25 million a year and that just facilitates about 2,000 people

The artists’ scheme, while seen as welcome by many, is not a real universal basic income scheme as it is restricted to a certain cohort.

“It is a welcome step in the right direction, and we’re very hopeful it’ll lead to the introduction of a real universal basic income,” says Colette Bennett.

According to a spokeswoman from the Low Pay Commission, its work “will be informed” by the pilot scheme for artists, and it has tasked the ESRI with preparing a report to address the potential for a universal basic income scheme in Ireland. The ESRI is currently finalising this report and the commission intends to provide an update on this research and its recommendations in the second quarter of this year.

What happens next, however, remains to be seen.

A universal scheme would be extremely expensive; the artists’ scheme is set to cost €25 million a year and that just facilitates about 2,000 people. Rolling that out to the 3.27 million Irish residents above the age of 14 and under 65 (the group for which we have accurate numbers) would cost €41 billion a year before offsetting tax receipts.

Social Justice Ireland’s proposal is that those on incomes of up to €200,000 would avoid normal tax rates on the income, although it would start to be tapered from an income of €75,000.

‘Cash improves lives’: San Francisco’s experience

San Francisco, a city weighed down by high living costs caused by the proliferation of tech firms, first introduced a pilot basic income scheme in May 2021. This gives 18 “no strings attached” monthly cash payments of $1,000 (€881) to 130 artists who have been disproportionately impacted by the Covid-19 pandemic. It has followed this with a further scheme, which will give 18 monthly cash payments to 60 artists.

According to Aisa Villarosa of the Yerba Buena Center for the Arts, which administers the pilot scheme, participants were randomly selected from the pool of eligible applicants. These applicants had to fulfil a means test to qualify, as their household income had to be below a certain limit, as determined by San Francisco’s poverty guidelines.

Thus far, the scheme has been deemed a success.

“Cash improves lives,” says Villarosa, citing the testimonials from artists who have benefited from the scheme.

Visual and performance artist Elleree Fletcher says the pilot has given her the freedom to expand her practice. “I am no longer limited to the walls in my bedroom. I am able to afford studio space and materials that allow my concepts to grow.”