A monthly payment of £1,600 will be offered to every 18-year-old leaving care under the Welsh government's basic income pilot.

The pilot will run for a minimum of three years, with each member of the cohort receiving a basic income payment of £1,600 per month for a duration of 24 months.

All young people leaving care who turn 18 during a 12 month period, across all local authority areas, will be offered the opportunity to take part.

The payment will be taxed and is expected to be counted as income by the UK government, meaning it would affect eligibility for benefits.

It is estimated that 500 people will be eligible to join the scheme, which is being launched this year and could cost up to £20m over three years.

The Welsh government says the pilot will enhance the support available to young people as they leave care and assess the impact that has on them.

It says it will provide a test for the stated benefits of basic income, such as addressing poverty and unemployment and improving health and financial wellbeing.

Minister for Social Justice Jane Hutt said: "Our Basic Income announcement today complements the Welsh Government’s ambition to ensure the most vulnerable in our society are supported.

"We know we’re in the midst of a cost of living crisis, and we’re determined to continually look at how best to support individuals in Wales who live in poverty.

"Care leavers have a right to be properly supported as they develop into independent young adults.

"It’s also important to note that this policy is underpinned by the United Nations Convention on the Rights of the Child, emphasising our commitment to strengthening the rights of children and young people in Wales.

"Yet, too many young people leaving care continue to face significant barriers to achieving a successful transition into adulthood.

"Our Basic Income pilot is an exciting project to deliver financial stability for a generation of young people that need it most.

"The pilot will build on the existing support offered to looked after children in Wales and ensure young people who take part in this pilot get all the support they need to give them the best possible chance to make their way in life and the transition out of care better, easier and more positive.

"We are fully committed to supporting those living in poverty, ensuring they receive adequate financial support so that everyone in Wales can live happy and healthy lives."