Unconditional, universal cash transfers waste money by giving it to people who don’t need it---guaranteed minimum avoids wasteful spending and costs less
Caddick 22 [Dominic, researcher specialising in the political economy of fiscal and monetary policy, BA in Economics from the University of Cambridge, “WHAT IF EVERYONE WAS ON UNIVERSAL CREDIT?” 28 January 2022, https://neweconomics.org/2022/01/what-if-everyone-was-on-universal-credit, New Economics Foundation]
The main drawback of a UBI is that it would be very expensive. One estimate from the Institute for Policy Research says that it would cost over £427bn a year to significantly reduce poverty in the UK: roughly double the Department for Work and Pension’s (DWP) current budget. This would require a significant change to our political landscape, as well as eventual major tax increases. Much of this money would be going to individuals who are already well-off, which is a questionable use of government funds. This could however be mitigated via progressive taxation that both partially funds a UBI and indirectly reduces payments to the wealthiest.
When it comes to a minimum income guarantee (MIG), one advantage is that it can target support at the people who need it most. A MIG can also be adjusted to consider the different needs of different families, with higher MIGs for larger families and those with disabled members. Because of this targeting, the MIG approach generally provides a higher minimum income level for a much lower cost. But conversely, the big potential downside is that it could be complicated to administer.