Reform Scotland said the “basic income guarantee” should go to all adults of working age, with a sum of £50 paid per week for each child, under the plan also known as the “citizen’s income”.
The group said the cash would go to people whether they are in or out of work as part of a “safety net to provide financial security for the jobless, and a safety trampoline to encourage more people to rejoin the workforce”.
According to the report “A Big Idea – The Basic Income Guarantee” all earnings would be taxed, but the basic sums of £100 and £50 paid out would never be withdrawn.
Critics warned of an “astronomical” cost to fund the scheme, which the authors of the study accepted would run into tens of billions of pounds.Under the changes, pensions and disability allowance would continue, with only work-related benefits affected.
The report’s authors claim the plan was needed due to a disincentive to work and a “welfare trap” caused by high levels of taxes faced by those starting employment or taking on more hours.
Existing tax and benefits arrangements make “it financially unattractive to take a job”, the report, written by former Scottish Green Party head of media, James Mackenzie, and former Scottish Liberal Democrat policy convener Siobhan Mathers.
It claims a “manifest failing of the present system is the cash penalty many face when they take a job”, and backed a system where “everyone in or out of work receives a guaranteed basic income”.
“Anything earned goes on top and is taxed at the relevant rate. Sometimes called a citizen’s income, the Basic Income Guarantee is a big idea whose time has come”, the report added.
However, the cost of delivering such a scheme would be £20.4 billion for Scotland and £247bn for the UK as whole.
The think-tank said that whether the powers are devolved or remain reserved to Westminster, the policy should be delivered by one single department.
Scottish Conservative finance spokesman Murdo Fraser said the plan would be too costly and could lead to those on welfare losing out.
He said: “The difficulty with such schemes has always been that, unless the overall cost is astronomical, those with additional needs who are currently supported by the welfare system could lose out.”
A Scottish Government spokeswoman said: “We will consider this report as we look at all ideas to help people in Scotland maximise their income.”