Presidential candidate Andrew Yang has proposed a $1,000 universal basic income for every American adult.

He is promoting the "Freedom Dividend" by shelling out cash to two families, one in Iowa, and one in New Hampshire.

Iowa Falls resident Kyle Christensen, 41, said he'll use Yang's funds to help his mother settle her medical bills.

Democratic Presidential candidate Andrew Yang is redoubling his efforts to promote a hallmark campaign policy -- a $1,000 universal basic income for every American over the age of 18 -- by giving an Iowa family $1,000 a month for one year. Yang is spending $12,000 of his own money to demonstrate what his proposed "Freedom Dividend" would look like in action in the state.

This will be Yang's second "trial run" of the proposal, his campaign said in a press release Tuesday. Yang, a New York entrepreneur, in February awarded the same stipend to a New Hampshire family.

"We have plenty of resources in this country, but the benefits of living in the wealthiest and most advanced nation in the history of Earth are not being shared with most Americans. We must build a new economy that puts people first. If there's one policy that would transform American lives for the better on day one, it's the Freedom Dividend," candidate Yang said in the press release.

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His proposed UBI would be funded by a 10 percent value-added tax, or VAT, on the production of goods and services, and would generate $800 billion in revenue.

Economist Marshall Steinbaum, an author of a Roosevelt Institute report on the macroeconomic effects of a universal basic income, chuckled at the New York entrepreneur's announcement. "In terms of conducting an experiment, using two families seems more like a gimmick than a test of the efficacy of the policy," Steinbaum told CBS News.

He doesn't think the proposal would work anyway, because its funding mechanism -- a VAT -- would disproportionately harm people with lower incomes. "It would basically negate the positive effects of the entire policy," Steinbaum said.

But the lucky winner on Tuesday -- Iowa Falls resident Kyle Christensen, 41 -- will be awarded a "Freedom Dividend" without being taxed, since the amount Yang gave them falls below the threshold for the federal gift tax.

Christensen lives with his mother, Pam, who is two years into remission from cancer and requires a hip replacement and kidney transplant, in addition to maintenance chemotherapy.

"I am really getting it for my mom, who has been sick for so long that she hasn't paid attention to politics, and at first didn't really understand what was happening," Christensen told CBS News.

He hasn't yet received a disbursement -- the first payment will be made in July -- but the pair already feels a sense of relief.

Presidential candidate Andrew Yang, center, visits Kyle and Pam Christensen in their Iowa Falls home.

First, he'll settle his mom's medical bills, then he wants to send her to Florida where her niece and nephew, who she helped raise, live.

"We are encouraged to use it for fun stuff and she really wants to go to Florida because she hasn't been able to see them for the past 15 years," Christensen said.

For Kyle, an IT professional who also works as an auto mechanic to make ends meet, not much will change. He has been discouraged by financial gaps in the past and says the cushion of a stipend motivates him to work even harder.

"When there is nothing there it's like what's the point, I am not getting anywhere. Now there is this cushion to relieve me and it helps you feel better and more motivated. I could work less but I have no intent to," he said.

He said every cent -- except for what is spent on the Florida trip -- will "be thrown right back into the economy in our area."