I think the central question is: "Will people work without (some kind of, likely 'tangible') reward?"
If you believe the answer is "Yes", then there is no (little) need to restrict the "free stuff" to essentials.
(Btw: I strongly believe that "Yes" is the answer.)
Most ideas about universal basic income, free healthcare, monetary support, etc. somehow seem to assume that the answer is "No", that people need to be forced to work.
Which makes total sense for our society, but IMHO only shows how bad we treat ourselves and each other.
"Kissing up and kicking down" is a result of rationing living essentials. So the good news (in my perspective) is: Even if we only provide for basic needs (for everyone, without hidden "punishments"), this whole sick capitalist ideology will unravel itself.
@wakame @scottsantens agreed. The answer to the "should jobs be necessary?" question is pure speculation. And it's a good thing that some countries are moving towards concepts like Universal Basic Income.
My personal opinion is that jobs are an inherently capitalist concept. You get rewarded if you have a job and do it well. But if you can't do that, you get punished by social segregation.
There are many people who struggle with work environments and are not "thriving".