This Discussion Paper brings together two short papers reflecting on current proposals for reform in income support policy in the context of continuing high levels of unemployment and underemployment. In the first, Sheila Shaver reviews the conflicting arguments for Participation Income and Basic Income, both of which claim to represent extensions of the social citizenship of the welfare state required for a post-industrial society. The paper reviews the reforms introduced in the Working Nation White Paper, and suggests that these are part of a large scale historical shift in the character of the Australian welfare state. While social rights of citizenship such as income support were previously complementary to employment and capital accumulation, they are now becoming integrated into the processes of economic growth and development. The paper by Peter Saunders focuses on Basic Income (BI) and two key issues which must be addressed in all such proposals, conditionality and transition. Conditionality refers to the definition of those circumstances under which people are entitled to receive income support benefits. BI proposals have also given insufficient attention to the problems associated with the transition to such a scheme, and in particular to the political influence of estimates of winners and losers. Advocates of a Participation Income such as Atkinson and Cass accept some degree of conditionality as the price of BI at an adequate benefit level; this paper offers an alternative proposal for a low level but fully unconditional BI, which is considered a more promising approach to the problems of transition.