ࡱ> $YZbjbjZZ :d8h8h:/:/}<L<8Q=Q=Q=e=e=e=8=?de=|<?DD(DDFIgJpzzzzzzz$?:{Q=JoFoF"JJ{==DD{RRRJ\=D=8DzRJzRRs9=vDe=3P:tz{0|0umP\Dvv Q=wRJJJ{{RJJJ|JJJJJJJJJJJJJ:/ C;:$Unconditional Basic Individual Universal Child Grant for Belgium following the Slovenian approach (SI_UBI UCG_BE) Dr. Valerija KOROEC valerija_korosec@yahoo.com @valerijaSlo Abstract This paper presents some evidence for developed countries suggesting that a universal, unconditional and uniform basic income (UBI) approach is more effective than a means-tested, conditional and targeted benefit system in addressing child poverty. In accordance with the aim of the International conference (2019) on Universal Child Grants (UCGs) a policy design for Universal Child Benefit for Belgium is outlined. It follows the concept of Universal Basic Income Proposal for Slovenia (KOROEC, 2010), for which the simulation already showed that a UBI approach is more effective than means-tested, conditional and targeted benefits. The findings of KOROEC (2010) fit well with those of the OECD (2017) study Basic Income as a Policy Option: Can it add up? and the IMF (2017) Fiscal Monitor Tackling Inequality. Also the most recent study Universal Basic Income: Debate and Impact Assessment (IMF, 2018) resembles KOROEC (2012) up to the point of similar outlining of the necessary steps in designing the UBI policy framework. Certain consensus starts to emerge on circumstances in which a UBI system is better than the current means-tested system for all. The affordability study for UBI UCG in Belgium presented here (i.e. SI_UBI UCG_BE) is simulated by MEFISTO, which is a micro-simulation model for Belgium based on EUROMOD. This simulation shows that with the same amount of money (no budget change) child poverty rate drops if the current 27 schemes are replaced with a universal flat-rate child grant (200 /month) and a 400 /month single parent supplement. Child poverty rates drop the most in the first and second income deciles. The majority of the population is either unaffected or benefits by the simulated reform, and the Gini is slightly lower, by 0.03. We confirm, at least for two developed countries that already have quite universal and comprehensive social security systems, Slovenia and Belgium, that within the same fiscal envelope (budget neutral) and with UBI implemented on a level just above the current Guaranteed Minimum Income scheme (GMI) a UBI system is better than the current (means-tested) system.  TOC \z \o "1-3" \u \h HYPERLINK \l "_Toc535515821" Introduction  PAGEREF _Toc535515821 \h 3  HYPERLINK \l "_Toc535515822" Why should a Slovenian UBI proposal be relevant for Belgium?  PAGEREF _Toc535515822 \h 3  HYPERLINK \l "_Toc535515823" Slovenian UBI proposal (KOROEC, 2010)  PAGEREF _Toc535515823 \h 5  HYPERLINK \l "_Toc535515824" The context  PAGEREF _Toc535515824 \h 5  HYPERLINK \l "_Toc535515825" Design of UBI policy framework  PAGEREF _Toc535515825 \h 6  HYPERLINK \l "_Toc535515826" The Aim and Goals  PAGEREF _Toc535515826 \h 6  HYPERLINK \l "_Toc535515827" Definition of UBI  PAGEREF _Toc535515827 \h 6  HYPERLINK \l "_Toc535515828" Evaluation Criteria  PAGEREF _Toc535515828 \h 6  HYPERLINK \l "_Toc535515829" The stages in the construction  PAGEREF _Toc535515829 \h 6  HYPERLINK \l "_Toc535515830" The level of UBI  PAGEREF _Toc535515830 \h 7  HYPERLINK \l "_Toc535515831" Budget neutrality  PAGEREF _Toc535515831 \h 7  HYPERLINK \l "_Toc535515832" The expected impact on household incomes  PAGEREF _Toc535515832 \h 8  HYPERLINK \l "_Toc535515833" The micro-simulation  PAGEREF _Toc535515833 \h 9  HYPERLINK \l "_Toc535515834" Resum of the findings of KOROEC (2010), OECD (2017), IMF (2017) and IMF (2018)  PAGEREF _Toc535515834 \h 9  HYPERLINK \l "_Toc535515835" Budget neutrality  PAGEREF _Toc535515835 \h 10  HYPERLINK \l "_Toc535515836" UBI implication on the relative and absolute poverty  PAGEREF _Toc535515836 \h 10  HYPERLINK \l "_Toc535515837" Design of Unconditional Basic Individual Universal Child Grant for Belgium  PAGEREF _Toc535515837 \h 11  HYPERLINK \l "_Toc535515838" The context of UBI UCG of Belgium policy design in 2018  PAGEREF _Toc535515838 \h 11  HYPERLINK \l "_Toc535515839" The stages in the construction of SI_UBI UCG_BE  PAGEREF _Toc535515839 \h 12  HYPERLINK \l "_Toc535515840" Preconditions (budget neutrality etc.)  PAGEREF _Toc535515840 \h 12  HYPERLINK \l "_Toc535515841" The evaluation criteria  PAGEREF _Toc535515841 \h 12  HYPERLINK \l "_Toc535515842" Changes in the system  PAGEREF _Toc535515842 \h 12  HYPERLINK \l "_Toc535515843" The level of UBI  PAGEREF _Toc535515843 \h 13  HYPERLINK \l "_Toc535515844" The Results of the simulated SI_UBI UCG_BE scenario  PAGEREF _Toc535515844 \h 13  HYPERLINK \l "_Toc535515845" Conclusion  PAGEREF _Toc535515845 \h 16  HYPERLINK \l "_Toc535515846" Sources  PAGEREF _Toc535515846 \h 17  Introduction The International conference on Universal Child Grants (UCGs) convened by UNICEF and the International Labour Organization in 2019 aimed to support and promote informed policy debate and decision-making with regards to cash transfers and the objectives of reducing child poverty. By Universal Child Grant we typically assume the form of non-contributory instruments characterised by no means-test, paid in cash or as a tax transfer without behavioural conditions, on a regular basis to the primary caregiver, for children between the ages of 0-18 years or longer if children are in full-time higher education/training or living with a disability. At a time when cash transfers have been increasingly adopted by countries as core elements of social protection and the global discussion on Universal Basic Income grows, debates on the effectiveness and trade-offs remain alive. Key issues in these debates include targeting and universalism, conditionality and policy financing. The costs and effects of the UBI are growingly discussed based on calculations and micro-simulations worldwide. The most recent include: 1) The OECD (2017) study, Basic Income as a Policy Option: Can it add up? 2) IMF (2017) Fiscal Monitor Tackling Inequality, where UBI was discussed as a policy that can help achieve redistributive goals; and 3) the most recent Universal Basic Income (2018): Debate and Impact Assessment. All those studies in many ways confirm the approach and findings of the UBI proposal for Slovenia made by KOROEC (2010). This Slovenian (budget neutral) approach was used in designing Unconditional Uniform Basic Income Universal Child Grant for Belgium (SI_UBI UCG_BE, 2018). Exploring a UBI UCG for Belgium under the budget neutral assumptions gives us a clear answer about whether an unconditional or means-tested program is better at reducing child poverty. This paper has 5 sections. In the first part it is argued why the Slovenian UBI proposal could be relevant for Belgium. Then the Slovenian UBI proposal (2010) is described. Section three discusses findings of that study complemented with some findings of the OECD (2017), IMF (2017) and IMF (2018). In fourth section a design of Universal Basic Individual Universal Child Grant (UBI UCG) for Belgium and micro-simulation results by MEFISTO are presented. Finally, some conclusions are laid out. Why should a Slovenian UBI proposal be relevant for Belgium? Why should any of them, Slovenia or Belgium, prefer UBI over their current means-tested and targeted social security system? Slovenia is by most classifications and standards a developed country. It is a part of the EMU, EU, and OECD countries. Slovenia was 25th among 189 countries of the world according to the Human Development Index (HDR, 2018). Among the very developed countries, Slovenia had in 2018 the lowest Gini coefficient (25.4). In 2017 Slovenia was 7th in EU with a 13.3% At-risk-of-poverty rate (cut-off point: 60% of median equivalised income after social transfers, SILC-Eurostat; Figure 1). This is a bit worse when compared to 2008, when Slovenia had a rate of 12.3% At-risk-of-poverty rate (Figure 2). Belgium is also a member of the EMU, the EU, and the OECD. According to the Human Development Index Belgium is 17th in the world, and Gini is 27.7 (HDR, 2018). The At-risk-of-poverty rate for Belgium was 15.9% in 2017 and 14.7% in 2008 (Figure 1 and 2). Although all presented numbers are a bit higher for Belgium these two countries are in many aspects very alike. Figure 1: At-risk-of-poverty rate, EU countries, 2008 and 2017, in %  Figure 2: At-risk-of-poverty rate by age, total and less than 18 years, Slovenia & Belgium, 2005-2017, in %  In Slovenia it is difficult to explain logically why there is any poverty if there is already a universal system for the Guaranteed Minimum Income (GMI), delivered so that: 1) all that who are unable to work (sick, old, disabled, mothers, children) and/or are unable to find a work, have the right to subsistence provided by the state; and 2) that all the others employed have a right to be paid at least on the level of subsistence. In Slovenia, there are Unemployment Benefits, Child benefits, Family benefits, Old Age benefits, Disability benefits, Sickness benefits within a Universal health system, that are tailored for each sub-population group. According to the Constitution, social security law, labor market law etc, there cannot be a person in Slovenia who does not have some means of subsistence, but in reality, it is not so. The one thing is a theory and the other is a practice. In practice, in Slovenia, many are left out of the social security system and below subsistence. Slovenian UBI proposal (KOROEC, 2010) The context There was a culture of tax and social contribution evasion and wage fraud which had been on the rise in Slovenia since independence in 1991; in a time of the world economic crisis this only escalated. Many workers were not paid and they were left with no financial means to support themselves and their families (KOROEC, 2014). 'On the paper they were paid and therefore they couldnt ask for social assistance and other kind of Guaranteed Minimum Income schemes (GMI). So, 'on the paper' everything was OK. Also, legally everything seemed fine, since they could sue their employers - on their own. Thats the main problem with Slovenias poverty discourse or any social policy discourse: in theory, all is OK. It would probably be possible to mend it, but it looked like a Sisyphean task. Closer examination, under the section Why Slovenia needs a UBI system in Slovenian UBI Proposal (2010) showed that Slovenian social security system is very complicated, full of contradictions and catch-22 situations. Where to start? Besides, how to start the reform in a country where people dont know how to cooperate across the political spectrum? Where most of the people were on guard to oppose any reform the government could propose? Why bother to change the law that so many violate anyway? Some people, then and now, think technology could help. Of course, we can always design a perfect police state, and since 2008 Slovenia has gone in that direction. But why should we support this, if we can get the same or better redistribution results by much less effort through a UBI approach? The priority of UBI proposal for Slovenia (2010) was therefore to apply the UBI idea in the simplest possible way: to build an idiot proof system no one could cheat and everyone could understand. In reducing the complexity of the current system, we could enhance transparency and consequently trust in the government, so it would be easier to introduce some urgent structural reforms. In that strange atmosphere of 2008 and after, UBI could be also seen as a kind of insurance policy for the people against the dangerous (extreme neoliberal) ideas of some political parties. It has to be pointed out that the Slovenias UBI proposal (KOROEC 2010) was not written only as a theoretical task, but also as a practical one (as a sort of safety belt in the case of emergency). That and the fact that it was written by a sociologist, who had no micro-simulation model at her disposal and therefore relied mainly on logical thinking were reasons for its simplicity . An economic crisis was waiting to escalate. UBI idea seemed to be simple enough to secure subsistence level for all. There was also an idea that the timing is right, that people will be open for a new approach when the old system is crashing. It was not so. This window of opportunity brought Slovenia just UBI proposal so far was presented (KOROEC, 2010) and the Organisation for UBI Promotion in Slovenia (Sekcija za promocijo UTD v Sloveniji). People were obviously so afraid that they preferred to stick to the old ways, in a manner of better a bird in the hand then hundreds in the bush. The EUs fiscal rule was about to be accepted in Slovenia. So, budget neutrality was in a way a pre-condition of the proposal, according to the political circumstances and the possibility of the need for instant implementation. There was also a scientific curiosity: what can be done differently with the same amount of money? Can we do it better? Design of UBI policy framework The Aim and Goals In 2010 the Slovenian UBI proposal was published on the internet. The aim of the proposal was to help to the Slovenian government by simplifying social administration, to actually deliver on the constitutional rights of income security that all citizens should have enough to survive. By doing that the Slovenian government would secure and preserve individual autonomy and the incentive to work in a time of economic hardship. Definition of UBI UBI is an income paid by a political community to all its members on an individual basis, without means test or work requirement. It is a combination of Phillip Van Parijs (2004) and BIENs definition. Eligibility to receive the Slovenian UBI comes with citizenship eligibility which again, comes with being born in Slovenia or with 10 years of residency, 5 years continuously. Evaluation Criteria The social justice criteria: The UBI system 1) should not worsen the income position of the most vulnerable and 2) should financially benefit the majority. To evaluate whether the introduction of a UBI could be a better option for providing income support in Slovenia, its potential impacts on income distribution had to be examined. The simplicity of design (Universal, Unconditional, Uniform, Basic, Individual). Instant implementation. The system should stay the same when possible, so that time- demanding political procedures would not be needed. Budget neutrality The stages in the construction Three population sub-groups were constructed for the purposes of instant implementation and the cost estimation. Three groups would be treated differently aiming to the same result: to guarantee each member of society a monthly income on the UBI level. The first group was retired and disabled people, the second employed people, and the third group were all the other people not employed: unemployed, children and poor. The three groups should be financed through different financial institutions under different regimes: Retirement Fund for the retired, FURS (Financial Administration of the Slovenian Republic for the employed and Ministry for Social affairs for all not employed. That means that the same institutions as in the current system would take care for the same group of people, although in a simpler, UBI way. The incomes of those retired early, retired and with a disability pension should remain the same, except for those that have a pension or disability benefits below UBI for them it would be added up to the UBI level. Those who are employed should be treated with something that could be seen as an advanced negative income tax. In practice, that means, if the employed person at the end of the month on his/hers individual FURS (Financial Administration of the Slovenian Republic) account wouldnt have money in the amount of UBI, FURS would add it up and later on reclaim it. The third group should get UBI. The level of UBI UBI level was set just above existing GMI benefits for different subgroups. UBI level was set by looking for equilibrium to satisfy the two evaluation criteria of social justice. UBI level was set above the highest level of Child benefit. UBI level was set above the level of existing GMI benefit (Social Assistance in Slovenia: Denarna socialna pomo ; DSP) for a single person without children. UBI level was calculated as an average of three components: Social Assistance for a single person with no children, of the Poverty Threshold at the point of 60% percent of the median income and 1/3 of an Average Net Wage. UBI level was set so that a family of two-adult and two-child of school age receiving GMI benefits and without any other source of income would receive a higher amount of support as under the existing tax-benefit system. Most UBI proposals set different levels for adults and children. KOROEC (2010) proposed an equal UBI (flat-rate) for adults and children. Firstly, because of this uniformity, no one would have any reason to cheat, secondly to be on the safe side in an era of dismantling the social state. For that reason, the money for the education voucher was explicitly included in UBI costs for the children. However, the costs of universal basic health care for children were included implicitly, with the assumption that public services would continue unchanged. Budget neutrality Within this budget neutral option the UBI fiscal envelope was set by the calibrated sum of existing universal and means-tested non-contributory transfers and tax allowances within the current tax system. Tax brackets would remain the same, but most (10 of them), though not all, existing tax-free allowances would be replaced with a UBI. Social contribution system remains the same. The majority of benefits remain unchanged, except 16 existing benefits which would be abolished (unemployment benefits, social assistance, and other generalized minimum-income schemes, student maintenance grants and family benefits). Unconditional, Individual, Flat-rate benefit (UBI) would be introduced. Public services, such as health, education, care, or other in-kind support were assumed to continue unchanged. The same goes for additional costs for specific needs people may have, such as the costs related to a disability or for renting suitable accommodation. The expected impact on household incomes The main features of such a UBI system (budget neutral, on the level just above GMI benefits) we expected to be: In most cases those in work would see the amount they receive 'as UBI' offset by higher income taxes as a tax-allowances were abolished. The majority receiving GMI benefits would receive the same or a bit higher amount as under current systems. Some additional cost is expected for the retired and employed, that in the current system where not included in the system, although their income was below subsistence level. It was important to account for non-take-up of existing benefits when examining the impact of a UBI: since a universal UBI would likely have near-complete take-up. The total of a UBI amount for a couple with 2 children was set to be a bit higher as the current GMI amount. Couples (without or with children) and any other income sources would receive more than from existing systems. The reason is that existing social assistance systems set the amount for couples at less than twice the amount for a single person (it is 0.7 for the second adult person). It is was not clear whether single parents with no earnings or any other private incomes would generally receive less than they do under existing GMI systems, which often provide extra support to single-parent households. It is was not clear how will this affect parents with pre-school children since this is connected with the local government support; local level GMI support was not included in the UBI proposal 2010. Table 1: Budget-neutral UBI level, Slovenia 2010, monthly  Source: KOROEC, 2010 Table 2: Budget implication of UBI set just above the level of GMI benefits; Changes in tax revenues and expenditures, annual amount, KOROEC, 2010  Source: KOROEC, 2010 Notes: Data for the year 2008. The micro-simulation In order to examine the impact of the UBI we used the micro-simulation model on the social policy system of 2008 at the Institute for Economic Research (IER). The micro-simulation of the Institute for Economic Research (IER) in 2010 showed that the lowest deciles were most likely to gain, but for instance, the 2nd deciles of older than 65 years and retired could see some decline in their income, as well some higher deciles in some sub-populations. Table 3: Impact of the KOROEC (2010) on certain most vulnerable subgroups - Income growth (in %)  Source: KOROEC (2012); calculation Institute for Economic Research; IER (2010). The KOROEC (2010) UBI proposal was very simple (rudimentary). It was expected that more detailed studies would follow. This was not the case, only a few university diplomas confirmed the calculation of UBI proposal (2010). Resum of the findings of KOROEC (2010), OECD (2017), IMF (2017) and IMF (2018) The IMF in its Fiscal Monitor: Tackling Inequalities (2017:21) admits to be convinced that means testing would be a superior alternative to universality if it could be perfectly designed and implemented. However, it admits as well, that the choice is not always obvious, given limited administrative capacity and information constraints in many countries. Well, we have to admit that Slovenia had and still have problems on both points. Therefore, we could say that Slovenia could be treated as a perfect candidate for a UBI system out of need of administration simplification. The most recent study Universal Basic Income: Debate and Impact Assessment (IMF, 2018) resembles KOROEC (2012) in outlining the necessary steps in designing the UBI policy framework. Both studies are also on the same page in describing malfunctions of the current system. Comparing to the IMF (2017) and OECD (2017)this (IMF, 2018) study stands out with the recognition that disincentives to work can be sizeable under the current system. However, in designing the data experiment aiming to heterogeneity in space and systems, it is like adding the complexity to already very complex task. In this view it is very similar to IMF (2017) and to (lesser extent) OECD (2017). KOROEC (2010) approach aimed in the opposite direction: reducing complexity of the task to the simplest possible level and hoping to get a clear answer, in what circumstances UBI approach is better than the current means-tested system. The answer of the Slovenia proposal in 2010 was clear: with the same amount of money the UBI system would be a better solution for the most vulnerable sub-populations. However, there is more to it. Slovenian findings corresponds with OECD (2017) and IMF (2017) in many ways, but especially well with the OECD (2017:11) budget neutral scenario, with the UBI level, which is initially set at GMI levels and increased until net government spending is the same as before the reform. Budget neutrality The fiscal cost of a UBI will depend on the level at which it is set (IMF, 2017: x). In the budget neutral scenario, it is obviously true the opposite, as well: the level of UBI is set by the current budget. Assuming that UBI is given to all individuals in the country then the UBI level is set by a 'fiscal envelope' divided by individuals in the country. There seem to be a consensus KOROEC (2010), IMF (2017) and OECD (2017) that within a budget neutral option the UBI fiscal envelope is set by the calibrated sum of existing universal and means-tested non-contributory transfers and tax allowances within current tax system. IMF (2017: 18_19) claims that they focused on budget-neutral options because of the limited fiscal space in many countries. OECD (2017:6) on the other hand, claims that This approach enables the identification of pure policy effects, in this case, how far existing means-testing social protection system is from a UBI system: if we take on the budget neutral approach, then only results on inequality and poverty have to be examined. The budget-neutral approach is logically the best way if we really want a clear-cut answer, which system is better: universal or means-testing regarding its potential impacts on inequality and poverty. We want to measure the change in income distribution when we apply the same amount of money under two different systems. UBI implication on the relative and absolute poverty There was an assumption that in Slovenia UBI system would broadly replicate existing systems of income since the system was so mildly changed and according to already low Gini and low poverty rates. This assumption was confirmed. This is in compliance with IMF (2017: 18) statement that The distributive impact of replacing existing transfers with a UBI will also depend on the coverage and progressivity of the existing transfer systemin other words, on how well the current system covers and targets vulnerable populations. This is this growing consensus that developed countries can introduce UBI at the level of their existing GMI schemes in a budget-neutral way if they already have a quite comprehensive system. That was also the message of KOROEC (2016) calculation of UBI level for 24 European & OECD countries. Rather than reducing the overall headcount of those in poverty, a UBI would change the composition of the income-poor population. A reduction in poverty among those currently not covered by social protection systems would be offset by some of those who are covered by existing social protection systems and who would lose out from the introduction of a UBI (OECD, 2017: 23). IMF (2017: 18) warns us about the same problem: A UBI distributes existing transfers uniformly across the population, thus potentially improving coverage of lower-income households, but it may do so at the expense of the generosity of benefits for those lower-income households that receive transfers under the current system. In Slovenia, we saw that happened to older than 65 and retired people in 2nd Decile (Table 3). It is a strange contra-argument not wanting to improve unfair system, because it will hurt some of the people who profited in the old system more than is their fair share in UBI system and which we obviously think is fairer over the current system. However, we can admit, that we are talking mostly about low-income groups that no one would like to expose to additional stress. This can be solved quite easily with a sensible approach in implementation. About the direct effect of a UBI on income poverty the OECD (2017:23) stated: Although there would be more winners than losers among low-income groups under a UBI, it would probably not be an effective tool for reducing poverty. Rather than reducing the overall headcount of those in poverty, a UBI would change the composition of the income-poor population. We have to agree, it is logical since we are shuffling around the same amount of money for more or less the same group of people. The biggest difference is that UBI importantly simplifies the current means-tested system administration. However, UBI is a better tool to reduce absolute poverty over the means-tested system, because UBI would at least bring those with the lowest incomes closer to the poverty line (OECD, 2017: 23). The difference between the content of the terms absolute and relative poverty in UBI discourse is not properly understood and creates a huge discursive problem. It would be a great achievement of all above studies if UBI implications on poverty would be finally recognized as follows: in developed countries with low inequality UBI is a great tool to reduce absolute poverty but not the relative poverty. Design of Unconditional Basic Individual Universal Child Grant for Belgium The context of UBI UCG of Belgium policy design in 2018 Since 2010 all of the above points have been persistently presented in Slovenia to the general public, professional public, politicians and others. After many lectures to various publics, I can say that there are several reasons why UBI discourse in Slovenia has not progressed in recent years. The most important one is general ignorance of the current system and ignorance of problems that are not of their personal concern. In the media, however, the thesis most promulgated is the idea that UBI will reduce work incentives more than the current system. Perhaps the persistent blindness of the fact that disincentives to work can be sizeable under current system (as stated also in IMF, 2018: 10) can be attributed to the 'power of capital' in the media. So when it became apparent that this could not be overcome, the next step was logical: we have to focus on two groups where the problem of work incentives is irrelevant, the retired and children. At the International Conference in Maribor Universal Basic Income as a Response to social inequalities in Europe, March 2015, as the first step in the introduction of the UBI in Slovenia, author (KOROEC, 2015) explained the idea of universal basic income for children (UBI UCG) in Slovenia. The difference between the current system was explained, a universal but still means-tested system, both applicable on the household and child UBI as a universal, unconditional and individual child grant. Slovenia is among rare EU countries that does not have universal child grants yet. By all the other aspects children grants in Slovenia are similar to common means-tested child grants in EU. In the year 2016 a Coalition against Poverty was set up, aimed at introducing UBI in Slovenia "step by step" first to the children, then to the poor (Sekcija UTD, 2016). The idea of introducing children's UBI since then become more important also in the European organization for UBI (Unconditional Basic Income Europe; UBIE). It became a part of UBIE agenda for the UBIE meeting in Budapest November 2018. That is why I simulated my idea of a Slovenian child UBI on MEFISTO. MEFISTO is a web-enabled micro-simulation model for Flanders (Decoster, 2012) that is publicly available ( HYPERLINK "http://www.flemosi.be/"www.flemosi.be). MEFISTO utilizes the engine of the EUROMOD (EUROMOD, 2017). EUROMOD is the European Union tax-benefit micro-simulation model (SUTHERLAND, 2013). The stages in the construction of SI_UBI UCG_BE Preconditions (budget neutrality etc.) To be a budget-neutral option, where the fiscal envelope dedicated to the UBI will be set by the calibrated sum of existing universal and means-tested non-contributory transfers and tax allowances within the current tax system, as in KOROEC (2010). Tax brackets remain the same. The social contribution system remains the same. The evaluation criteria The UBI system 1) should not worsen the income position of the most vulnerable and 2) should financially benefit the majority. Its potential impacts on income distribution regarding the Gini coefficient and the rate of poverty risk for children have to be examined. Changes in the system Twenty-seven (27) existing benefits and tax-free allowances connected with the child's subsistence level were replaced with a UBI for a child and with a UBI for a single parent, which is taken as a necessary part of child income security. Table 4 gives an overview of simulated changes. Table 4: Overview of changes in SI_UBI UCG_BE simulated reform  Source: author. Note: Powered by Mefisto (EUROMOD). The level of UBI A UBI level was set to satisfy the evaluation criteria within a budget neutrality precondition. And vice versa: budget neutrality was achieved by adjusting the UBI level within the evaluation criteria. The best combination was 200 for a child with 400 supplements for single parents. Table 5: Budget-neutral UBI level, SI_UBI UCG_BE simulated reform, monthly  Source: own calculations. Note: Powered by Mefisto (EUROMOD). The Results of the simulated SI_UBI UCG_BE scenario The simulated reform causes changes in certain taxes and benefits. Table 6 gives an overview of these changes, as well as their net budgetary impact. The simulated reform SI_UBI UCG_BE showed zero cost of introducing UBI UCG as proposed. Table 6: Changes in tax revenues and expenditures, SI_UBI UCG_BE simulated reform, annual amount  Source: own calculations. Note: Powered by Mefisto (EUROMOD9; mln (1.000.000), mld (1.000.000.000). Table 7 shows the effects of SI_UBI UDG_BE reform on the percentage of children below the poverty: the child poverty rate drops for 1.83 pp in simulated reform. Table 7: The effects of the simulated reform on a set of poverty indicators  Source: own calculations. Note: Powered by Mefisto (EUROMOD). Table 8 shows the poverty rates before and after simulated reform, as well as the change by income deciles. Child poverty rate after UBI dropped most in the first income deciles (-9.66 pp) and in the second income deciles (-8.63 pp). Table 8: Child poverty: The effects of SI_UBI UDG_BE reform on the percentage of children below the poverty line by equivalised income deciles.  Source: own calculations. Note: Powered by Mefisto (EUROMOD). Table 9 shows a breakdown of losers and winners share and average gain by equivalised income deciles. We can see that the majority of the population is among the winners or people unaffected by this simulated reform. Table 9: Breakdown of Losers, Unaffected, Winners Share and Average gain by Deciles Source: own calculations. Note: Powered by Mefisto (EUROMOD). We can confirm that this SI_UBI UCG_BE micro-simulation complies with all evaluation criteria. With the help of the MEFISTO micro-simulation program for Belgium, it can be confirmed that the UBI UCG program is better than the current targeted and means-tested system in lowering child poverty rate with the same amount of money. There could be a question, why UBI lowered relative poverty for the children in spite of conclusion that UBI in not the best tool to lower relative poverty in developed countries. This is because of the already established fact, that UBI brings closer to the poverty line those with the lowest income. As we can see in Figure 2, the poverty rate for the children in Belgium is above the poverty rate for the population. Proposed UBI UCG therefore lowers child poverty rates by making their income bigger relative to the income of other part of the population. We can acknowledge also the second already established problem that children might gain on the expenses of some other low income groups. This difference should not be huge since this proposal makes very little difference in the Gini coefficient: after UBI Gini is lower only by 0.03. Nevertheless, that means that even such budget neutral proposal would demand careful and sensible political approach to avoid the resentment among different low-income groups and get public support for the implementation. Of course, to avoid potential conflict among low-income groups the simplest way is to introduce UBI for all at the same time. But that can bring about the resentment of higher-income groups. Sensible approach within the implementation process will be needed in either way. Conclusion In three studies, KOROEC (2010), OECD (2017) and IMF (2017), we reduced the number of variables within the puzzle which is called the current social security system, one by one. First of all, we have done this with the prerequisites of budget neutrality, secondly with the prerequisite that the main features of the old system remain the same (for example, the Social Contribution System and Progressive Taxation System) and thirdly that the UBI level is at the same level or slightly higher than the previous transfers for ensuring minimum income security (GMI). In all three studies, we found that the current social system in the developed world is already close to a universal system and that it already provides a standard of living for almost all, with the exception of some system errors. Finally, using micro-simulations, we looked at whether the same amount of money that was intended for 'same' people (people with the lowest income in society) was more efficiently redistributed in an unconditional than in a conditional system. Three micro-simulations proved that a universal system is a better one in regard to income redistribution. This mental experiment is easier and the answer is even more explicit if we examine the question of the effectiveness of an unconditional conditional system on the population of children. We did this on the example of the children's UBI in Belgium. We can confirm that UBI approach in developed countries such as Belgium is better at addressing child poverty than current means-tested programs; the simple the better. The reason is obvious: the complexity of this post-modern era requires so much administrative effort that probably no country on the world could live up to those demands. Secondly, the old system of social security is such a complex mosaic of ideas and approaches applied through time that even its designers dont understand its inner contradictions anymore. There is also a third explanatory perspective. After the Second World War, the norm of socially valuable work was an industrial work. This simplified world of industrial work was on the other side weighed up with complex social security systems that (under) valued and (under) paid other forms of socially valuable work that was done outside of the world of industrial work. Now we need the opposite approach. The complex world of post-modern work requires a simple social security system. When will that be understood worldwide? According to the recent IMF, OECD studies and the conference UN and ILO conveyed together on Universal Child grants, we could say this time has finally come. According to our paper, we could also say that the question of UBI affordability is solved, at least for the developed countries on the level just above current GMI. The logic, numbers, micro-simulations show that UBI is not only affordable but also simpler than the current means-tested system. However, there are still many open issues. There are a number of questions about how to implement UBI. Who will be responsible for the design the UBI? Is it going to be uniform worldwide? Will we go step by step for the subgroups of the population? Probably the biggest problem that remains to be solved is to get public support for the implementation. Sources Act on Minimum Wage (Zakon o minimalni pla i v Sloveniji). Retrieved 24.12. 2018: HYPERLINK "http://www.uradni-list.si/1/content?id=96327"http://www.uradni-list.si/1/content?id=96327 2. Boltin, Uroa (2013) Nekaj pripomb k originalno vklju enim variantam izra una UTD. Priloga k Excelovi datoteki UTD 2010 izracun U Boltin april 2013. Ljubljana. (Comments on original scenarios UBI calculation. Supplement to Excel file: UBI 2010, calculations Boltin, 2013) Retrieved 30.12.2018:  HYPERLINK "http:// www.gibanje.org/upload/File/UTD2010komentarUBoltin-april2013.doc "  www.gibanje.org/upload/File/UTD2010komentarUBoltin-april2013.doc Decoster, Andr & Kevin Spiritus, Gerlinde VERBIST (april 2012) MEFISTO: A NEW MICRO-SIMULATION MODEL FOR FLANDERS. Flemosi Discussion Paper 14. EUROSTAT (2018) EU SILC. EU-SILC survey [ilc_li02] EUROMOD (2017) How theBelgian tax-benefit system is modelled in EUROMOD, including an overview of the system and recent changes:HYPERLINK "https://www.euromod.ac.uk/sites/default/files/country-reports/year8/Y8_CR_BE_Final.pdf"2014-2017 (EUROMOD version H1.0) HDR (2018) Human Development Indices and Indicators 2018: Statistical Update. New York, UNDP. Holly SUTHERLAND, Francesco Figari (2013) EUROMOD: the European Union tax-benefit microsimulation model . INTERNATIONAL JOURNAL OF MICROSIMULATION (2013) 6(1) 4-26 INTERNATIONAL MICROSIMULATION ASSOCIATION IMF (2017) International Monetary Fund, Fiscal Monitor: Tackling Inequality. Washington, October 2017 IMF (2018) Universal Basic Income: Debate and Impact Assessment. IMF Working Paper by Maura Francese and Delphine Prady. WP/18/273. KOROEC, Valerija (2010) Predlog uvedbe UTD v Sloveniji zakaj in kako? (UBI Proposal for Slovenia - why and how? Working Paper, IMAD RS) Delovni zvezek t. 6/2010, let. XIX. UMAR RS. Ljubljana. Retrieved 24.12. 2018:  HYPERLINK "http://www.umar.gov.si/fileadmin/user_upload/publikacije/dz/2010/dz06-10.pdf" http://www.umar.gov.si/fileadmin/user_upload/publikacije/dz/2010/dz06-10.pdf KOROEC, Valerija (2012) BI Proposal for Slovenia. BIEN 2012, Munich. Retrieved 24.12. 2018: HYPERLINK "http://www.bien2012.org/sites/default/files/paper_143_en.pdf"http://www.bien2012.org/sites/default/files/paper_143_en.pdf KOROEC, Valerija (2014). Zgodba (predloga) o UTD v Sloveniji in njen kontekst.The Story of UBI (Proposal) in Slovenia and the Context.Ars & Humanitas,8(1), 188-199. KOROEC, Valerija (2015) Zgodba o UTD v Sloveniji Pregled. UBI in Slovenia An Overview (presentation). The International Conference in Maribor Universal Basic Income as a Response to social inequalities in Europe. Sekcija za UTD in UBI-Europe. HYPERLINK "http://utd.zofijini.net/2015/02/14/international-conference-unconditional-basic-income-and-inequalities-in-society/"http://utd.zofijini.net/2015/02/14/international-conference-unconditional-basic-income-and-inequalities-in-society/ KOROEC, Valerija (2016) What should the level of basic income be in 24 European & OECD countries? Retrieved 24.12. 2018:  HYPERLINK "https://basicincome.org/news/2016/06/what-should-the-level-of-basic-income-be-in-24-european-oecd-countries/"https://basicincome.org/news/2016/06/what-should-the-level-of-basic-income-be-in-24-european-oecd-countries/ Mencinger, Jo~e (2015) "HYPERLINK "https://ideas.repec.org/a/cmn/journl/y2015i3p159-174.html"The Revenue Side of a Universal Basic Income in the EU and Euro Area,"HYPERLINK "https://ideas.repec.org/s/cmn/journl.html"DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 3, pages 159-174, September. Mencinger, Jo~e (2017). "HYPERLINK "https://ideas.repec.org/a/bpj/bistud/v12y2017i2p8n3.html"Universal Basic Income and Helicopter Money,"HYPERLINK "https://ideas.repec.org/s/bpj/bistud.html"Basic Income Studies, De Gruyter, vol. 12(2), pages 1-8, December. Mencinger, Jo~e (2019, v tisku) Prihodkovna stran UTD v EU in EMU s komentarjem. (The Revenue side of the Universal Basic Income in EU and in Euro Area? Translated (Mencinger, 2015) and commented for Slovenia. Fakulteta za socialno delo. Ljubljana. OECD (2017) Basic Income as a Policy Option: Technical Background Note Illustrating Costs and Distributional Implications for Selected Countries. Rus, Velko (1990) Socialna dr~ava in dru~ba blaginje (Social state and Welfare Society). Ins titut za sociologijo, Domus. Ljubljana. Sekcija UTD (2016). Slavko Gr ar, Tereza NOVAK, Valerija KORO`EC:Call for a Coalition against poverty in Slovenia.  HYPERLINK "http://utd.zofijini.net/2016/10/17/povabilo-v-zaveznistvo-za-boj-proti-revscini-v-sloveniji/" http://utd.zofijini.net/2016/10/17/povabilo-v-zaveznistvo-za-boj-proti-revscini-v-sloveniji/ Standard Eurobarometer 73. Spring 2010. European Commission. Standard Eurobarometer 90. Autumn 2018. European Commission. Van Parijs, Philippe, 2004. Basic Income: A Simple and Powerful Idea for the Twenty-First Century. Politics & Society. WRR (1985) Safeguarding social security. Summary of the twenty-sixth Report to the Government. Netherlands Scientific Council for Government Policy. The Hague.  The Republic of Slovenia covers about 20 thousand square km and has approximately two million inhabitants. Its bordered by Italy, Austria, Hungary, Croatia, and the Adriatic Sea. Slovenia exhibits a very low trust in national government: 23% tend to trust the national parliament in spring 2010 and 24% in autumn 2018, Standard Eurobarometer, 73 and 90, European Comission.  Another argument for the simplicity I was not aware of in 2010 is the fact of 'the system rigidity' or 'path dependency'. Professionals who understood the system (and the proposal) were not ready to comply out of fear that UBI might undermine their careers and life- long work in means-test system. Therefore, the proposal has to be simple enough, that ordinary people can understand and claim it.  Mencinger who explored the possibility of UBI on a European level through European taxes (2015) or helicopter money from the ECB (2017) in (Mencinger, 2019) wrote: "I was one of those who expressed concerns about UBI in 2004. It should be noted that at that time politicians repeated the empty slogans of the Lisbon Strategy on creating a knowledge society, talked about the flexibility of the labor market, the privatization of education, health and social security, and uniform tax rates. In short, they undermined the social rights already acquired. That is why I thought that the dilemmas that universal income is opening up are too many, and it would be better to stay with what we already have.    Fiscal Rule. HYPERLINK "http://www.mf.gov.si/en/areas_of_work/economic_governance/fiscal_policy/fiscal_rule/"http://www.mf.gov.si/en/areas_of_work/economic_governance/fiscal_policy/fiscal_rule/  In Slovenia, inequality, and poverty had never been the major argument for UBI implementation, but who would propose a system that would make it worse?  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consumer prices they were pretty much on the same level in 2008.  The level of Universal Basic Income for Slovenia 'for employed population' was set according to Veljko Rus ), suggestions (1990: 225). He brought the idea of Partial Basic Income (DOOD) form Netherlands where Scientific Council for Government Policy in 1985 (WRR, 1985) proposed a Partial Basic Income (PBI) in its reportSafeguarding social security: An outline of a new system of social security(Report no. 26, 1985). Direct or indirect income taxes could be increased or decreased, with the current progressive shape, but this calculation was not part of KOROEC (2010) proposal. It was done afterward by Boltin, Uro (2013).  It is logical: instead of allowing individuals to keep a portion of their income tax-free they will receive it in a 'form' of UBI. In the Slovenian proposal, an 'advanced negative income tax' was designed because people did not trust government administration and any bigger change of the tax system would be opposed. It is beyond the scope of this paper, but it was meant that means-tested support for housing costs remains in place but may change in value for families whose incomes change due to the introduction of the UBI. The UBI amounts are counted as income in means tests so that those with no private income continue to receive the same amount of cash housing support as in existing tax-benefit systems.  Some years ago I have heard about the Austrian micro-simulation model SORESI and Belgian MEFISTO. I have tried both but preferred later for its user-friendly interface and English version. I have tried to simulate the Universal Basic Income Proposal for Slovenia (2010) on Belgian data then. It was to complex. In 2018 I have tried with the design of Unconditional Basic income Universal Child Grant for Belgium (SI_UBI UCG_BE). The results were surprisingly good. I wrote to the Philip Van Parijs in Belgium and he helped me to get into contact with an expert on MEFISTO who didnt oppose the findings. In autumn, Barb Jacobson (member of UBI from England) reminded it me on the International Conference on child UBI and I sent the proposal for this paper. Why am I writing about this context? Since 2010 exploring the possibilities of UBI implementation in Slovenia for the author became a kind of whistleblowers work. This is work done without any formal infrastructure and without any support from the public administration and government offices. The point is:  HYPERLINK "javascript:void(0)" scarcity of the resources was again the main reason to keep it simple.       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