The introduction of a Universal Basic Income (UBI) in Ireland could see some low-income households worse off.
That is according to a new ESRI report, which reviewed international evidence on a UBI and identified key issues in the design of any future pilot 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.
Author of the report Dr Paul Redmond told Newstalk Breakfast how any such system could work.
"Basically it's paid to every adult in the country regardless of their circumstances," he said.
AJMYME A man holds €50 notes. Picture by: Paul Maguire / Alamy Stock Photo"A true UBI really should be set at a level that is sufficient to live on, or at least you'd want to set it at a level perhaps that may lift people out of poverty.
"Then the question naturally is 'What is that?'... you might then choose to set it at a level that's equal to the at-risk of poverty rate.
"If you were to implement at that rate, that would be approximately €300 a week or about €15,00 a year."
Flat tax rate
Dr Redmond said in this scenario those who work on top of that could then be taxed at a flat rate.
"There was a series of reports commissioned in the late 1990s for Ireland, and it was suggested to implement a UBI - actually at a more modest level that wouldn't be at the level we're talking about - would require a flat, higher tax rate of about 50% or 60%," he said.
"Recent proposals have also said you can do things like maybe get some money from increasing Stamp Duty, a tax on betting; and then to remove the lower rate of tax of 20% and replace it with the higher rate of 40%."
He said any such plan would double the country's social welfare bill.
"The current social welfare bill in the Department of Social Protection is about €25 billion - if you were to pay everybody over 18 in Ireland a UBI of approximately €300 a week, then the gross cost at least would be €50 billion."
'Drastic changes'
Dr Redmond said the system may still require a 'welfare top-up' for some.
"Generally speaking people at the higher end of the income distribution would be worse off, and again generally speaking lower income people would be better off.
"If you are to implement a UBI and implement these kind of drastic changes to our system of tax and welfare, while you might on average have many low-paid people better off you have this big chunk of low-income households that may actually be worse off.
"Going back to those studies in the late '90s, I think it was almost one in four families in the lower 30% of the income distribution would be worse off.
"What you then have to do is you then have to implement a supplementary sort of welfare top-up, to make sure that anybody that's been made worse off would actually be brought up to a level whereby they're actually better off - or at least not worse off - after the UBI," he added.
