How can Governments help people out of poverty?

A look at the countries looking to cure poverty by effectively paying an income to those who need it.

One in 10 people around the world live on less than $2 (£1.50) a day, according to the World Bank.

While this is a reduction from 36% of the global population in 1990, there’s clearly still a long way to go to properly tackle poverty.

A controversial method being tried out by a few countries is universal basic income payments.

These are handed out to poorer people to make sure everyone has access to a basic amount of money to live on.

Support for basic income schemes has been growing in recent years, with several countries and cities around the world trialling projects.

Here, we look at how they have worked (or not).

Italy

Earlier this year, Italy rolled out its 'Citizens’ Income’ scheme for poor people who have lived in the country for at least 10 years.

It’s been implemented by the Five Star Movement, Italy’s populist Government.

Just over one in 10 Italians (10.6%) are unemployed, according to figures from statistics agency Istat.

The aim of the income scheme is not only to alleviate poverty, but to boost spending and improve the economy overall as well.

The amount of income being paid depends on the individual circumstances, and eligibility is dependent on savings and income.

For example, someone needs to be earning less than €6,000 (£5,141), have less than that amount in their bank account, and they can’t own a car more than six months old to be able to get it.

Those who don’t currently have a job could receive up to the maximum of €9,360 (£7,980) per year and must spend a certain amount of that on housing costs.

While for those in unemployment, their salary could be topped up to this amount.

Those with children are eligible for more money and the money is loaded onto a digital card each month, and any money not spent is lost.

Of course, it’s far too early to say how successful that scheme will be, so let’s look at one that’s already run its course.

Finland

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Finland was one of the first European countries to trial a universal basic income system back in 2017.

It saw 2,000 unemployed people aged 25 to 58 randomly selected to receive €560 (£478) a month.

The aim of the scheme was to see if those receiving the money would be more likely to take up paid work.

It came after calls for reform to the Finnish welfare system after the country’s unemployment rate hit 9.2% – higher than any of its neighbouring countries.

But after just two years, the Government rejected a call from Kela, the Finnish Government body responsible for unemployment benefits, for further funding for the scheme and it ended.  

The results of the trial found that the income people received made a negligible difference to employment rates but it did improve people’s overall wellbeing.

The Finnish finance minister, Petteri Orpo, said after the scheme ended that he was looking into trialling other welfare schemes.

Canada

A three-year basic income project was launched in Ontario in April 2017, giving money to 4,000 people.

It was planned for three years and those in the scheme could usually receive up to CA$17,000 (£9,600) a year from it.

Those with disabilities were eligible for slightly more.

Those in the scheme had to give back 50 cents to the Government for every CA$1 they earned if they were in work and they also had to opt out of some Government social services.

The idea behind the scheme was to see if over the trial people taking part saw their health, education and job prospects improve.

However, when a new Government was elected, one of the first moves was to cut the trial short and instead try to help poorer people with more traditional methods.

When announcing the early end to the project children, community and social services minister, Lisa MacLeod, said it simply wasn’t sustainable.

India

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In 2011, Unicef backed a basic income pilot project in a number of villages in India.

It lasted two years and was called the Madhya Pradesh Basic Income Pilot.

It saw 6,000 people in the villages of Madhya Pradesh receive a basic income from a funding pot of $1 million (£750,000), which was provided by the charity.

Results from the two-year project showed that the majority of people receiving the money spent it on ways to create extra income, such as investing in small businesses and education, suggesting that it could give people the ability to bring themselves out of poverty.  

Kenya

In a small village in Kenya, the charity GiveDirectly began a scheme in 2015 whereby residents are given $22 (£16.50) a month for 12 years.

It’s part of an experiment to see how people manage with a basic income and the results so far show that instead of stopping work and wasting the money, those involved have used the money to improve their own situation.

The money has gone towards school fees, home repairs, medicines and investment in local businesses.

Research found that people's spending on alcohol and cigarettes went down when they received the money.

One of the reasons suggested for this was that as people were more optimistic with the boost to their income, they become less reliant on ‘temptations’ such as alcohol or cigarettes.   

Scotland

The Scottish Government has proposed a basic income project in four locations – Glasgow, Edinburgh, Fife and North Ayrshire.  

The ‘Citizen’s Basic Income Scheme’ would be created to reform the current social security system in Scotland.

These four areas were given total funding of £250,000 last year by the Scottish Government to develop pilot models for a basic income scheme.

The main aim of the project is to test out the role of a basic income in reducing poverty in Scotland.

NHS Health Scotland will support the four local authorities to develop a common framework to assess the outcomes of local pilots of the scheme.

They are due to submit their plans to the Government by March 2020, at which time a decision will be made whether to continue funding for the projects.