Eligibility for Legal Aid
Each application for legal aid is assessed by applying these tests:
- the means test, which also assesses the contribution your client must make towards the cost of the case
- the merits tests, and
- the guidelines test.
To be successful, an application must pass all three tests.
Means
What the means test takes account of General Definitions Income Assets Commercial activities/lifestyle Maximum allowable deductions/equity Continuing review of means
What the means test takes account of
The means test takes account of
including those of any financially associated person as well as the applicant. In other words, it considers all possible means that an applicant may have to pay for the legal services he or she requires.
The test takes into account funds received but not now available to the applicant or any financially associated person that could have been used to pay for their case. If the applicant has dissipated these funds without making provision for payment of their legal expenses, aid may be refused.
Income and assets are assessed separately, and the applicant must be eligible on both to qualify.
The means test also fixes the amount of the contribution the aided person must pay initially. If the case continues and becomes more expensive, further contributions may be required, and we will notify you and your client of this by letter. For further information about contributions, see Early assessment of contributions, Collecting the client's contribution, and Contributions .
The means test identifies three groups of applicants:
1 Those who are eligible on means straight away
- If otherwise eligible (ie on guidelines and merit), people who are eligible on means get aid from the date the properly completed application is received, subject to payment of a contribution.
2 Those who are not eligible on means at this time, but who may become eligible in future, if their case is not readily resolved
- For example, we may think they have some capacity to pay for the legal services they presently require, but not for a longer or more complex case, should it develop into such. Or we may think that they can afford to pay for a guilty plea, but not for a trial.
- In these cases we work out what we think the person can afford to pay. They will be told this amount. If the case is not resolved after they have spent the assessed sum, they should reapply, sending in proof of what they have spent. We will review their eligibility at this time, and let them know whether they are now eligible or not. They should not assume that they will automatically get aid when the contribution is spent, as they will still have to pass each of the eligibility tests at that time.
3 Those who are not eligible on means for aid for this matter at all.
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General definitions
Some of the terms used in assessing income and assets are defined below. The applicant Financially associated persons Trusts Dependants Child care costs
The applicant
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Income
Income means any source of funds received by the applicant or a financially associated person.
Funds usually treated as income Funds not usually treated as income A child's income Income testing Deductions
Funds usually treated as income
Assets
What is taken into account Disregarded assets Excluded assets A child's assets Assets testing
What is taken into account
- All the assets of the applicant and any financially associated person are taken into account and must be declared.
- Assets include anything in which the applicant or the financially associated person has a legal or equitable interest. They may include items not registered in that person's name. If the asset is owned jointly or in common, ownership can be apportioned accordingly.
- Assets include lump sums received by the applicant or the financially associated person that do not prevent the applicant drawing a Centrelink benefit (as opposed to the types of lump sum payments categorised as excluded assets below). Examples may include payments such as compensation (including workers compensation or other insurance payments), payments from accessible superannuation funds, annuity payments, retrenchment pay or like sums.
Disregarded assets
- The assets of a financially associated person may be disregarded where
- they are now separated from the applicant and it is not reasonable to expect any support
- the financially associated person has a contrary interest in the case
- disclosure of the application for aid could damage the applicant's interests, or
- for other special reasons, the financial association should be disregarded.
- These assets must still be disclosed but you may wish to give reasons why they should be disregarded.
Excluded assets
- The following assets do not normally preclude a grant of aid, although they must still be declared:
- ordinary household furniture, clothing and personal effects that a person would reasonably need
- tools of trade, unless of exceptional value
- equity in motor vehicle, up to a maximum based on the published re-sale figures for a 5 year old 6 cylinder family car. Where the applicant lives in a household of two or more, and both incomes are assessable under our test, combined equity in two vehicles will be allowed, up to the maximum.
- equity in the applicant's or financially associated person's principal home, up to a maximum, based on the amount equal to the median value of an established home in Adelaide. This includes any kind of accommodation (even caravans, boats, etc) owned wholly or partly by the applicant and in which the applicant actually lives, and land on which they are building a home where they intend to live.
- equity in a farm or business which is the main source of the applicant's income, up to a maximum based on assets limits set under the pensions assets test.
- Of course, any equity in real estate will give rise to a statutory charge.
- An asset which would normally be excluded may be taken into account if it appears likely to be sold during the case, or will otherwise yield funds from which the applicant could pay for legal representation.
A child's assets. Children's assets are assessed as follows:
- if the child is supporting him or herself, or receiving a social security benefit in their own right, their assets as above
- if the child is financially supported by a parent or guardian, the assets of that person or those persons.
However, the parent's or guardian's assets may be disregarded if:
- he or she has a contrary interest in the case
- disclosure of the legal aid application to them would damage the child's interests,
- he or she cannot or will not financially assist the child.
Again, the assets of the parent or guardian (as a financially associated person) should still be disclosed, even if you think they will be disregarded.
Assets testing
- Equity in all assets, other than in those that are excluded (see Excluded assets), is assessed. A sliding scale is applied to determine whether the applicant should pay any and what asset contribution. After allowable assets have been deducted, the first $3000 yields a contribution of $1350, and after that $3000, the remaining assets are assessed dollar for dollar.
- Debts may not normally be set off against assets unless secured over them by registrable instrument. Ordinarily, debts are only relevant when considering whether an applicant is in a situation of special hardship.
- All sources of financial support are considered, including assistance which might be available from any financially associated person on request. Ability to borrow is also considered. To the extent that a person is considered able to raise funds, borrow, or obtain credit, they will be expected to do so and aid will be refused. Legal aid is a funding source of last resort.
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Commercial activities/lifestyle
These may be taken into account along with the disclosed means. If the Commission considers that the applicant or financially associated person can or should be able to afford to pay privately by reason of these, aid may be refused.
Maximum allowable deductions/equity
The maxima allowed for various items in the means test are derived from the Henderson Poverty Line, published by the Institute of Applied Economics and Social Research, University of Melbourne from time to time, and other indices. All maxima are reviewed each January and July, based on the figures for the preceding September and March quarters.
Income Housing costs Child care Dependants Maintenance Home equity Equity in farm or business Vehicles Allowable assets
Income
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Continuing review of means
Although the means test is carried out before aid is granted, means are always under review. To continue to receive aid, the aided person must continue to satisfy the means test throughout the grant of aid. It is a condition of the grant of aid that the aided person will keep the Commission informed of any changes in their financial circumstances (see Conditions of aid).
Notifying the Commission of changes in means How to report changes in means Consequences of review of means
Notifying the Commission of changes in means
- For example, the Commission must be notified if the aided person or their financially associated person
- takes up any employment
- forms a financial association with any other person or entity (including by marriage, commencement of a de facto relationship, joining a partnership, becoming a beneficiary of a trust, etc)
- inherits or becomes entitled to inherit anything of value
- starts any business or becomes self-employed
- travels overseas
- wins money or any valuable item in a lottery or competition
- receives any valuable gift
- raises any loan
- becomes entitled to any settlement or award of compensation or damages
- acquires or expects to acquire funds from the sale of any valuable item, or
- receives financial assistance from any other person or entity.
- These are just examples. Any change in circumstances must be reported.
How to report changes in means
- To report a change in circumstances, the aided person should complete a current financial statement and submit it together with relevant documents to the assigning officer, who will review eligibility. This may result in aid continuing unchanged, continuing subject to an increased contribution, or to costs recovery or other conditions, or it may result in aid being stopped.
Consequences of review of means
- If aid is stopped or the conditions of aid are varied as a result of such review, the aided person, if dissatisfied, may appeal against this decision in the usual way.
- If it is discovered that an aided person has misrepresented their financial situation to the Commission, legal action may be taken.
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Merit Aspects of the merits test Your obligations with regard to merit
Aspects of the merit test Legal aid is only available for matters which we consider have merit. Merit may change as a matter progresses, as a result of new evidence, changes in the law and decisions of the court, so it is kept under constant review. If a matter which we have funded loses merit, aid may stop, or may be confined to some particular purpose, such as negotiating a resolution.
There are three aspects to the merits test which the applicant must satisfy:
- reasonable prospects of success
- the prudent self-funding litigant
- proper use of public funds.
Reasonable prospects of success
- The case must have at least reasonable prospects of success. An even or 50/50 chance is not enough. The exception is serious criminal cases for trial in the District or Supreme Courts, where a reasonably arguable defence will do.
- In High Court cases, the Commission has adopted the following merits test:
'Where legal assistance is sought for the hearing of an application for special leave to appeal to the High Court of Australia, aid will be approved where the Director, having consulted with either Chief Counsel for the Commission or such other appropriate counsel, is of the opinion that there is a point of law, which is reasonably arguable, in a case appropriate to be put to the High Court.'
The prudent self-funding litigant
- The case, if successful, must produce a real benefit to the aided person, such that the "ordinarily prudent self-funding litigant" would risk their own funds for in this case. For example, aid will not be granted where:
- the cost of the case will outweigh the benefits
- the applicant wants to defend a claim, but has nothing of substance to lose
- the applicant wants to sue for money, but the other party will not be able to pay, or
- there is no real likelihood of enforcing orders obtained.
- Legal aid is only meant to put the aided person in an equal position to the person of means, not in a better position.
Proper use of public funds
- The case must be a proper use of public funds. These funds are stringently limited and very much in demand. Aid will therefore only be granted where we consider that it is really needed and will be applied to a deserving and proper purpose. For example, aid will not be granted where
- the dispute is trivial, or is minor in proportion to the cost
- it is not fair that the public should pay for the case, such as where a parent wants to take a child on an overseas trip, and seeks court orders for a passport
- there is little or no evidence to support the case, and aid is sought to make wide-ranging enquiries just in case some evidence should come to light
- the case is vexatious
- the applicant's purpose is merely to delay, harass or frustrate the other party, or avoid proper obligations
- the applicant's purpose is to vindicate their reputation, or contradict another party's evidence, where this will make no practical difference to the outcome of the case.
Your obligations with regard to merit Legal and professional duty Applying for Aid Reporting during the case
Legal and professional duty
- The Legal Services Commission Act requires you to tell the Commission anything that is relevant to your client's grant of aid (s.22). The Professional Conduct Rules specifically state that if you think the case no longer has reasonable prospects of success, you must tell the Commission (Rule 12). A lawyer acting under a grant of aid is under a legal and professional duty to tell the Commission these things even though this may result in aid being stopped, and even though the client may not wish you to do so.
- Please note that what you write to us by way of this or any other report may later become available to your client under the Freedom of Information Act.
Applying for aid
- There are two ways in which in assisting a client to apply for legal aid you can indicate to the Commission your opinion on the merit of the case:
- If the client wishes, you may send, with the application for aid, a letter which sets out your views on the merits of the proposed legal action. This will be considered, together with all other relevant material, in assessing the application.
- If you believe the case has merit, you should sign the solicitor's certificate in the application form. While the application will be accepted whether the solicitor's certificate is signed or not, we may assume when the certificate is left blank that you were not satisfied as to merit.
Reporting during the case
- Throughout the case, you report to the Commission about how the case is progressing and about merit. Continued aid depends on continued merit, and we will stop or limit aid to a case which no longer has merit. You must supply to the Commission any information and documents requested, eg key documents such as expert reports and court orders.
- There is no confidentiality between you and your client when it comes to reporting to the Commission about means or merits, or other matters relevant to the grant of aid (see s.22 of the Legal Services Commission Act and Rule 12 of the Professional Conduct Rules).
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Guidelines As well as passing the means and merits tests, an application for aid must satisfy the guidelines for legal aid, which are applied in three ways:
Commission guidelines The Commission sets its own guidelines from time to time. These apply to matters arising under State law and, where not covered by the Commonwealth Guidelines, to matters arising under Commonwealth law. The Commission may depart from or waive these guidelines in exceptional cases.
The guidelines are designed to ensure that
- the limited funds available for legal aid are directed to the areas of greatest need
- aid is not granted in cases where it is not really necessary because:
- there is some other possible source of funding, or
- the case could be handled by some other agency or service, or
- it would be reasonable to expect the applicant to represent him- or herself.
There are two types of Commission guidelines, the general principles which apply across the board in determining whether a case should get aid (the general guidelines), and a list of matter types which are specifically excluded from grants of aid (the specific guidelines).
The general guidelines Aid will not be granted in the following circumstances:-
(a) Where there is some other funding source, such as
- where the applicant can expect to recover damages, compensation, costs or any sum of money from the case, such that the case is self-funding or the lawyer should act in expectation of payment in due course. In this context, the applicant should apply to the Law Society's Litigation Assistance Fund or Disbursements Only Lending Scheme
- where the case will involve the sale of a valuable asset, from the proceeds of which the case could be funded
- · where there is any other fund from which the costs can otherwise be met, as in the case of litigation over a deceased estate, or statutory provision for funding, as in cases of representation of protected persons in certain appeals before the Administrative Appeals Court
- where the applicant engages in commercial activities or maintains a lifestyle such that we consider that they can or should raise funds privately.
(b) Where we think the costs of litigation of a dispute outweigh the benefits, or where another agency or service may assist with this litigation, such as
- Welfare Rights Centre (disputes over eligibility for social security benefits and appeals to the SSAT)
- Department for Family and Youth Services (adoption and spousal maintenance applications)
- Working Women's Centre, or a trade union (unfair dismissal applications),
- Equal Opportunity Commission or Human Rights and Equal Opportunities Commission (discrimination and human rights cases)
- Environmental Defenders Office (environmental law matters)
- Police Complaints Authority (complaints against police)
- Legal Practitioners Conduct Board (complaints about lawyers' conduct, conciliation of disputes over their bills)
- Ombudsman (complaints about government agencies, public health facilities, local councils, declined Freedom of Information requests, etc)
- Telecommunications Industry Ombudsman (telecommunications complaints)
- Banking Ombudsman (complaints about the actions of financial institutions)
- Insurance Enquiries and Complaints Ltd (disputes between insurers and their own insureds over decisions on claims)
- Office of Business and Consumer Affairs (disputes over consumer purchases, commercial practices, etc)
- Community legal centres (neighbourhood mediation)
- the Commission's Child Support Unit (advice and assistance for parents with all child support issues)
- Public Trustee (drawing wills).
- Of course, if the other service or agency is unable to assist in the particular case, the applicant should provide details of this in their application for aid.
(c) Where it would be reasonable to expect the applicant to represent him- or herself.
- These include cases where the court or tribunal concerned commonly deals with self-represented litigants (such as minor claims, residential tenancies and unfair dismissal matters).
Specific guidelines For similar reasons, aid is not normally granted in the following specific types of cases:
- commercial cases - including disputes over failed businesses and business debts, guarantees, liquidations, directors' liability, contracts, commercial mortgages, sale and purchase of businesses, etc
- compensation cases - including claims for injuries caused by traffic accidents, medical or dental negligence, work injuries, criminal injuries, unsafe premises and claims for loss due to professional negligence.
- complaints against professionals or police (contact the relevant professional body or authority)
- conveyancing
- criminal cases where there is no real chance of gaol
- defamation
- expensive criminal cases where it is obvious from the outset that the cost of defence will exceed the maximum that we can spend
- minor civil actions, ie. where less than $6000 is in dispute
- neighbour disputes - including fences, trees, noise, car parking, water run-off, etc (try the local neighbourhood mediation service)
- probates, administrations and claims on deceased estates
- restraining orders - civil (police domestic violence services, or the Commission's domestic violence worker will assist applicants for orders), or
- unfair dismissal cases.
In practice, this means that in matters arising under State law, most legal aid is spent on criminal cases where gaol is a real possibility, and child protection cases.
Waiver The guidelines in matters arising under State law can be waived in special or exceptional cases, in the Commission's discretion.
There is no definition of special or exceptional cases, as each case is considered individually. Special hardship, either relating to the litigation, such as a direct threat to the applicant's livelihood that could be averted by representation, or to the applicant's personal circumstances, such as health, distance, language or literacy factors may be considered. Exceptional circumstances of any kind are also relevant. Applicants who believe that any grounds for waiver exist in their case should put these forward to the Commission.
Guidelines will only be waived if the Commission is satisfied that in the particular case before it, waiver is justified. Any or all of the foregoing factors may exist but not lead to waiver. Waiver in one case does not create a precedent for others. If you think there are special circumstances in the case, describe these in the application or accompanying letter. Waiver of guidelines is a matter for the Commission, and such issues may have to be dealt with by way of appeal, if aid is initially refused.
Commonwealth Guidelines
Child Support Aid is not normally granted in child support matters, because our Child Support Unit will usually be able to assist. Our Unit is quite separate and independent from the Child Support Agency even though the name is similar. The Unit will help both carer and payer parents with free advice. If the matter requires extended help, and your client cannot afford private representation, we will consider whether we or some other agency can assist with documents and representation in court.
Funding caps Funding caps apply in all matters. A funding cap is the maximum amount of aid which can be granted for any one case.
The cap differs according to whether the matter arises under State and Commonwealth law, and whether it is a family, criminal or civil law matter. See also, Common Questions.
Funding caps in State matters In criminal law matters that are not regulated by the Commonwealth guidelines, the caps are:-
- $60 000 in a criminal law matter involving one defendant
- $120 000 in criminal law matters involving multiple defendants. But if costs exceed $90 000, then aid will not be granted for an appeal.
In civil law matters that are not regulated by the Commonwealth guidelines, the cap is $60 000.
Separate caps apply for 'in need of care' applications:
- $12 500 for each party
- $17 500 for independent representation for the child.
Funding caps in Commonwealth matters Those applicable in matters arising under Commonwealth law are set out in the Commonwealth Guidelines.
In family law matters, where aid is first granted after 4 April 2005, the caps are $12,000 per party and $18,000 for a child representative (see Commonwealth Family Law Guideline 19.2 for full details). Note:
- Although the child representative's funding comes from the Commission, the parties are expected to contribute to the extent that they are able. If they are unable to, they should explain this in writing to the child representative. In particular, if there is to be a family assessment, the parties will each normally be asked to contribute half the cost. Where a party is in receipt of a grant of aid, their contribution may be by way of a deduction from their potential legal aid entitlement. If, say, they contribute $500 towards child representative costs, their potential maximum entitlement to legal aid reduces from $12,000 to $11,500.
- Also, the child representative must apply for costs orders against one or more of the parties in accordance with Commonwealth Family Law Guideline 3.2, at an appropriate time in the proceedings.
- In family matters the cap is Australia-wide, ie legal aid expenditure in other States/Territories is counted towards the cap, and applies until the child reaches age 18. So long as the case is the same matter, no fresh cap arises.
In criminal law matters, the cap is $40 000 per applicant (see the Commonwealth Criminal Law Guideline 11 for full details). In Commonwealth criminal matters, the guidelines fix no start date.
No cap is imposed in civil law matters arising under Commonwealth law.
Common questions Is my client automatically entitled to the maximum when aid is granted? No. It is important to understand that the cap is a maximum. It is not necessarily the amount that will be granted in a particular case. Aid can be stopped at any time, for example because the case is finished, or the applicant is no longer eligible, or for some other reason connected with the conditions of aid. Few cases actually reach the cap. Most cost much less, so for most people, the cap never creates a problem. It only affects cases which are unusually expensive.
What happens when the cap is reached? Once the cap is reached, aid will stop. This can happen at any stage of the case, even before or during the trial. You can find out from us as the case goes along how much funding is left before the cap will apply.
What about hardship? In cases covered by the Commonwealth guidelines, the Commission has no power to change the caps, or to decide not to apply them in a particular case. Therefore, although you can appeal against the cap, if it has been correctly applied it cannot be waived.
In cases not covered by the Commonwealth guidelines, the Commission can waive or vary the cap in its discretion and the comments earlier in this section under Waiver apply.
The forum test We will only grant aid for cases to be heard in South Australia. If the case is to be heard elsewhere, or should be or is likely to be heard elsewhere (for example because this is where previous proceedings have been heard, or because children the subject of a residence or contact dispute live there), the application should be made to the legal aid body in that State, and not to us.
If the case is transferred from the courts of one State or Territory to those of another, aid from the first legal aid body may stop, unless our reciprocity agreement applies. If aid stops, the applicant will need to apply afresh to the legal aid body in the new State or Territory. Their rules may be different: the applicant will not necessarily qualify in one State just because they qualify in another. The legal aid bodies are separate and independent of one another and cannot influence each other's funding decisions.
If a matter is funded in one State or Territory, and then in another, the second funding body will collect and pass on any money due to the first funding body at the end of the grant.
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