Despite enormous advances in technology and the accumulation of (financial) wealth, millions of people in high-income countries still suffer from unemployment, under-employment and lack of means to have a decent standard of life. These problems are predicted to intensify with the adoption of new digital technologies, including automation and robotisation. Recently, universal basic income (UBI) has become a popular policy idea to reform social security systems in keeping with the future needs of automatized and robotized economies. However, UBI has a fundamental weakness which can set welfare states into a downward spiral. Participation income is an alternative option that would rectify the inherent problem in UBI while still offering a more productive alternative to existing social assistance schemes.