A universal basic income (UBI) would cost the State up to €50 billion a year while requiring substantial changes to the current tax and welfare system, the Economic and Social Research Institute (ESRI) has indicated.
In a new study, the think tank explored the possibility of introducing a UBI here.
A UBI is defined “as a universal, unconditional payment that is made regularly, is sufficient to live on, is not means tested and carries no work requirements”.
The cost of implementing a UBI would be “very high”, the study said, estimating that in 2019 it could have involved a gross cost of close to €50 billion per year.
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“Previous work for Ireland in the 1990s indicated that an income tax rate of up to 50 or 60 per cent would be required to finance a UBI,” the ESRI report said.
The institute modelled four possible UBI scenarios, considering an income of €1,200 per month, €1,000 per month, €208 per week and a fixed €10 billion scenario, which ranged in cost from €50 billion to €10 billion.
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The most significant impact of adopting a UBI was the potential reduction in poverty, it noted. However, the study also suggested that a UBI could reduce the stigma associated with welfare receipt while reducing the administrative complexity of the current welfare system.
It could also avoid situations where people are discouraged from work or give people the financial freedom to leave insecure or exploitative work.
“The idea of a universal basic income receives a lot of attention in the public debate,” the report’s author Paul Redmond said.
“However, very little is known about the impacts of such a policy. In this work, we review the international evidence on universal basic income and highlight the main issues for consideration in the design of any future UBI pilot in Ireland,” he said.
