[hansvm]

Any scheme reducing total payout based on other income sources suffers from the same flaw, and it's really just a question of magnitude as a function of income level. I'm not entirely certain that's a bad thing (you'd want a real economist for those kinds of questions), but the impact on incentives is unavoidable.

If you don't reduce total payout based on other income sources, you're describing UBI (or perhaps paying people extra when they earn money, though at first blush that alternative sounds fraud-prone and unstable).