1. I address this somewhere else. I agree this is broken, but this is not a problem with the benefit system - it's something to do with wages not rising accordingly with everything else.

2. Perhaps, although if they do something stupid with that money, they still need supporting - so you either let people go homeless / starve or help them (which creates a new layer of welfare)

3. I'm not saying twice the food would be consumed, I'm saying prices would rise accordingly which would mean consuming the same amount of food costs more than it does now. The goal posts will just be moved and the poverty line will be above the basic minimum everyone gets paid.