The important part of my comment about gradual reduction was that people should never be put in a situation where if they make $N, they get additional $500 from the government, but if they make $N+0.01, they get nothing.

Regardless of how big is the $N, and how specifically they received the $0.01. Even if they received the $N using tax-exempt forms and the $0.01 using taxable forms. Or if $N is the limit for the tax-exempt form, and the $0.01 is the first cent above the limit.

Otherwise we get various kinds of crazy situations where people are punished for doing something that would otherwise be rewarded. Especially with poor people these kinds of situations are known to often lead to bad outcomes, both individually and socially.

...and the relevant part for this debate is that if this gradual reduction is implemented, the outcome is more similar psychologically to basic income than to unemployment benefits, because there is not a sharp dividing line between "not working" and "having a low-paying job".

(A hypothetical example of a gradual reduction of government support which still does not lead to giving money to everyone would be giving people max(0, $500 - 0.2 X) money if they made $X otherwise. Which means that an unemployed person would get $500; a person who made 0.01 from adsense would get $499.99 regardless of whether adsense income belongs to some bureaucratic category or not; a person getting $200 from their job would get $460, which would make their total income $660; a person getting $2500 or more from their job would get nothing; etc.)