Germany launches basic income pilot project

Germany officially announced on Friday the start of the Basic Income Pilot Project aimed at finding out how giving a group of people €1,200 each month for three years will affect their lives, news wires reported. The study authors hope that a million people will apply for the project by the 10 November deadline.

Up to 20,000 people will be randomly selected and extensively interviewed about their life situation. From that group, 1,500 people will be selected for the three-year income experiment. A total of 120 will receive the basic income and the other 1,380, who won't get money, will form the comparison group.

The application form, available even before the official start of the project, was flooded from the very beginning. In the first 72 hours after the application opened more than that one million people applied. But the original deadline will stay, and the researchers hope they can attract more funding to create extra spaces in the study for people to receive the basic income. The active phase of the project will start in spring 2021.

According to the project’s website, anyone over 18 years-old and whose primary residence is in Germany can apply for the study by filling out this online application form. Students and benefit recipients can also apply. However, the basic income is offset against corresponding benefits, meaning it could lead to the reduction or cancellation of some benefits. But on the website of the site, researchers point out that in most cases the basic income is higher than the social benefits paid out by the government.

This study has one important condition: participants must fill out a total of seven questionnaires during the three years, each of which takes about 25 minutes to complete. If the questionnaires are not filled in, the payments will be stopped. According to researchers, the questionnaires are crucial for scientific knowledge. They will contain questions on topics such as consumer behaviour and how people are spending their time.

"Otherwise, the basic income is absolutely unconditional: you can earn as much extra money as you want - or none at all," the team behind it say on the website. Participants can spend the money "on whatever they want". "There are no guidelines, no checks and no deductions," say the researchers. The basic income is not taxable. It's seen as a gift from lots of individual donors, the researchers say. There is no gift tax because the amounts given per donor and participant are below the tax-free limit. It is not subject to income tax. The money does not have to be paid back.

Finland made similar experiment few yeas ago. From January 2017 to December 2018, 2,000 unemployed Finns received €560 a month. The researchers behind that trial concluded that while it led to people out of work feeling happier, it did not lead to increased employment.

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