A universal basic income (UBI) is a payment made to all individuals without any means test or activity test.[6] Proposals for UBI schemes go by a variety of names including citizens¡¯ income and basic income guarantee (BIG).[7]
UBI schemes are closely related to guaranteed income and negative income tax (NIT) schemes (these are explained below). The major difference between a UBI and these schemes is means testing. As explained below, this may be a less clear-cut distinction than it seems because it is possible to design UBI and NIT schemes that have the same impact on disposable income.
Key features of UBI schemes
Most UBI proposals share three features:
universal—it is paid automatically to all individuals (or all adult individuals) without a means test
unconditional—it is paid without conditions (for example, job search requirements) and
adequate—it is set at a high enough level to protect citizens against poverty.[8]