DJ, the only serious problem with that is time the time lag - you get money based on how poor you were last time they checked, which means you'll get more than you need when you don't need it, and less than you need when you do. Which is admittedly a flaw with current system.
Far better simply to give the money to everyone under all cases in full, and tax from the first dollar of income - use the system we've already got to handle manipulating people's money supply rather than build two systems towards the same purpose.
The only time this doesn't work is when you think there are some poor people who simply don't deserve assistance - in this case, its hard to kick them out.
And yeah, MZ, scriver makes a good point - at least locally, that sort of pressure was 100% from the school - they would come down hard on teachers who were grading "too strictly" and thus making them look bad. (and gets calls from parents)
Brings me sort of back to the Olympic thread - what, exactly, is a teacher getting paid for? To perform the job they were hired to do, to demonstrate their expertise in best way they can, or to make their organization look good? Here, at least, they are often strictly at odds.
In my experience, those dedicated to the second are more likely to reap rewards, even if they don't bother teaching a single thing in any of their classes. (The current principle of my old high school, when I took classes there and he was just a teacher, had us rewrite the entire book and then gave us a test with the answers to rewrite. I don't think he taught a single thing the whole class, and no one got less than a B)