The big issue with such a situation is that for the worker, there is no difference if they work or not, since they are anyway in both scenarios earning the bare minimum to survive - so in essence such a system is stating in practice that the value of that labor is already zero.

However, in a concept where the "bare minimum to survive" is unconditional, then the incentives of employer and employee become aligned with the true situation of economy, since the amount that the employer would be replacing by automation is equal to the amount that the employee is getting above that bare minimum, and the decision to automate this task or not becomes the same for a particular employer as for the whole economy.

Also, even for the classic welfare model, this argument fails in the normal case where there cannot be workers earning the bare minimum to survive, as there is a labor price floor, the minimum wage, which is supposed to be (and in any currently functioning welfare state, actually is) a "livable wage" that's strictly larger than the bare minimum to survive, and larger than the long-term benefits such a worker would receive.