What does bitcoin really stand for? The only unique feature is that it's a decentralized currency. My idea doesn't break the decentralized feature that Bitcoin provides. The worse case scenario in my idea is that the government account becomes malicious and refuses to do its job of providing a universal basic income. For example the government account could become dormant (private key is lost or owner is dumb). In that scenario the currency becomes deflationary since the money supply would shrink 3.5% every year, and at some point the currency would collapse.

But just because there's a scenario for the currency to collapse doesn't mean it's a bad idea. Bitcoin has many risks that could lead to a collapse such as Sybil attacks, and other weaknesses found here https://en.bitcoin.it/wiki/Weaknesses
Of course my idea will have the same issues to deal with plus the scenario I gave above. But I believe the benefit of being able to provide a basic income for all individuals is worth the added risk.