Guide to Legal Aid Eligibility Assessments

Legal Aid Eligibility Assessment Daniel Bacon (work in continual progress)

[Please note that rules may be relaxed or changed under the Emergency Period established under Regulation 3 of the Health Protection (Coronavirus, Restrictions) (England) Regulations 2020]

There are two levels of Legal Aid:

  • “Controlled Work” is legal help or help at court. Eligibility for Controlled Work is assessed by the provider;
  • “Licensed Work” / “Certificated Work” is legal representation. Eligibility for Certificated Work is assessed by the Legal Aid Agency (LAA).

The forms of civil legal service are given in Reg. 12(3) The Civil Legal Aid (Merits Criteria) Regulations 2013.

  • “Legal help” means civil legal services but NOT acting as mediator / arbitrator; issuing / conducting court proceedings; instructing an advocate in proceedings; preparing / providing advocacy in proceedings (Reg. 13 CLA(MC)R 2013).
  • “Help at court” means instructing an advocate in proceedings; preparing / providing advocacy in proceedings (Reg. 14 CLA(MC)R 2013). Informal advocacy only (usually for mitigation purposes in possession proceedings) (Lord Chancellor’s Guidance, para. 6.9).
  • “Legal representation” means civil legal services in or for proceedings, either as investigative representation (to explore the chance of success of proceedings, and to include urgent advocacy) or as full representation (to mean other legal representation) (Reg. 18 CLA(MC)R 2013). In the County Courts, High Court, Court of Appeal, Supreme Court etc. (Schedule 1 Part 3 LASPOA 2012). Formal representation with a good chance of success (Lord Chancellor’s Guidance, para. 6.9) or formal investigation where there is substantial need (>6hrs investigation OR disbursements >£400 + VAT) for representation to find out the chances of success (Reg. 40(1) CLA(MC)R 2013 and Lord Chancellor’s Guidance, para 6.11).

[NB There are other forms of civil legal service (all covered by the two levels of Legal Aid above), and all these forms are described in Reg. 12 CLA(MC)R 2013 and the Lord Chancellor’s Guidance (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/330878/legal-aid-LAA-lord-chancellors-guidance.pdf), p.14].

This guidance is for Controlled Work.

It is required under Section 4 of the Legal Aid, Sentencing, and Punishment of Offenders Act 2012 that any directions that are to be binding on or any guidance that is to be given regard to by the Director of Legal Aid Casework is to be published under this Section (pursuant to s4(5)) and that such directions or guidane so published is binding on or must be had regard to by the Director of Legal Aid Casework (pursuant to s4(3)).

Unless otherwise specified, reference to “The Regulations” below means the Civil Legal Aid (Financial Resources and Payment for Services) Regulations 2013.

The key documents of Government guidance can be found here: https://www.gov.uk/guidance/civil-legal-aid-means-testing#evidence

1. Is the client’s case in scope?

Clients whose cases are within scope should be offered Legal Aid support (s9(1) Legal Aid, Sentencing and Punishment of Offenders Act 2012), subject to financial eligibility.

Cases within scope are detailed in Schedule 1 Part 1 Legal Aid, Sentencing and Punishment of Offenders Act 2012 (http://www.legislation.gov.uk/ukpga/2012/10/schedule/1).

In housing matters, within scope cases are:

  • Judicial review of housing decisions (Para. 19 Sch 1 Part 1 LASPOA 2012);
  • Abuse of position / powers of public authority (Para. 21);
  • Possession proceedings, including counterclaims (Para. 33);
  • Support to homeless people to find accommodation (Para. 34);
  • Housing disrepair causing a serious risk to health and safety (Para. 35).

2. Is client properly in receipt of a passporting benefit, directly, or indirectly where included in the benefit claim of a partner (see definition of partner below)?

  • Income Support
  • Income-based Jobseekers’ Allowance
  • Income-related Employment and Support Allowance
  • Guarantee Credit
  • Universal Credit

If YES, then no need to consider the income tests. (Reg. 6(2)).

Properly in receipt means they receive the benefit and you are not put on any notice whatever that they might be receiving it improperly.

The Income Tests

Calculate income from the ONE CALANDER MONTH prior to application (i.e. assessment date 5th April, assessment period 6th March – 5th April inclusive)

The client’s partner’s income must be aggregated with the client’s. A partner is:

  • Spouse
  • Civil partner
  • Partner living (or normally living) with client as a couple

IF the relationship has not suffered a breakdown that is likely to be permanent, i.e. where at least one of the parties believes the relationship has broken down in a way that is likely to be permanent.

[UNLESS that partner has a contrary legal interest in the matter in which the client is seeking legal aid].

3. Gross income test

i. What is gross income?

Gross income is income before deductions are made.

Excludes housing benefit.

Income includes money the client earns, money entitled to accrue to the client, money received by the client from any other source (including assistance from friends or relatives).

Income includes any payments made directly to third parties by another person on behalf of the client (e.g. another person paying the client’s bills / rent / mortgage).

Non-passporting benefits received must be included as income (including Working Tax Credit, Child Tax Credit), EXCEPT:

  • Disability Living Allowance
  • Attendance Allowance (including where paid as a constant increase to disability pension)
  • Any payment made out of the social fund
  • Carer’s Allowance
  • Community Care / SEN direct payments
  • Back to Work bonus IF treated as payable as Jobseeker’s Allowance
  • Severe Disability Allowance
  • Exceptionally Severe Disability Allowance
  • Military disability / death pensions
  • Foster child support payments in excess of the relevant dependant’s allowance
  • Payments made out of the independent Living Fund / Welsh Independent Living Grant
  • Personal Independent Payment
  • Payments on Account of Benefits and Budget Advances
  • Transfer Advances of Universal Credit (Reg. 17 Universal Credit (Transitional Provisions) Regulations 2014).

[If benefits or other payments which would normally be included as income are payable to a victim of the Grenfell Tower fire BECAUSE they were a victim of the Grenfell Tower fire, AND are not being paid by an individual personally known to the client, then these benefits or other payments should not, at the discretion of the provider, be included as income].

Income includes money that became due within the period of calculation but which has not yet been received.

Income includes money received from parents, student grants, and student bursaries.

If self-employed, income is the drawings taken from the business for personal use.

A client is not allowed to intentionally deprive themselves of income in order to qualify for legal aid. Income disposed of must still be taken into account.

An annual bonus is NOT income – it is capital.

ii. Calculating monthly income

If a payment is made weekly, multiply by 52 and divide by 12.

If a payment is made four-weekly, multiply by 13 and divide by 12.

In both cases, this gives you the monthly income figure. Add up all the appropriate monthly income figures.

The monthly gross income cap is £2657, plus £222 for the fifth and each subsequent dependent child. For the purposes of this section, a dependent child is one for whom Child Benefit is received by the client or his partner.

If the total monthly gross income is higher that the appropriate cap, the client is ineligible.

If the client is to start a new job in the next month and earnings will mean the client will exceed the cap, then you must base your assessment on the next calendar month and refuse the application. The same is true for other major changes in circumstances (e.g. divorce).

4. Disposable income test

i. What is disposable income?

Disposable income is total monthly gross income minus deductions.

     ii.      Calculating disposable income

If the client has a partner (see definition above), deduct £181.41 (regardless of contrary interests, except for couples going through divorce or separation).

If the client has a dependent child or a dependent relative living in the same household, deduct £290.70 per child or relative MINUS the amount of independent income or benefits that child or relative receives (NOT INCLUDNG THE LIST OF DISREGARDED BENEFITS – see above). If the dependant relative’s capital is over £8,000, then no deduction should be made for the purposes of calculating the client’s disposable income. (If the parents etc. are living in the same household but are separated, dependence allowance for the child can only be applied in respect of ONE of the parents’ Legal Aid applications – this will be the parent who receives child benefit for the child or (if no child benefit is received) then the parent who can show they have the primary caring role from their own money).

For the purposes of this section, a dependent child is one for whom the parent who receives child benefit for the child or (if no child benefit is received) then the parent who can show they have the primary caring role from their own money.

If the client pays another person maintenance payments (former partner / child / relative), then these payments are to be deducted (whether they are made by court order, CSA ruling, or voluntary agreement). (Including payment of bills or mortgage payments).

Income tax paid that month is to be deducted

  • For self-employed, this is notional: the previous year’s annual income tax bill divided by 12. If none available for any reason then deduct nothing.

National Insurance paid that month is to be deducted

  • For self-employed, this is notional: deduct £12.78.

Rent or mortgage payments (as per tenancy / mortgage agreement) for main dwelling MINUS housing benefit received is to be deducted up to a limit of £545 if there are no dependents as per this section – if there are dependents then no limit exists – MINUS any amounts clearly identifiable as for water rates / council tax / insurance premiums.

Additional rent or mortgage payments made to pay off arrears are to be deducted but only if actually paid, up to the same limit of £545 if applicable (see above), but ONLY IF this is being paid not only in order to qualify for Legal Aid.

For lodgers: only deduct that amount paid for lodging, NOT board. If impossible to identify, assume 50:50 split.

If in receipt of a wage (either claimant or aggregated partner), deduct £45 for each such person in receipt of wage. = Nominal employment-related expenses (Reg. 27)

If claimant or partner has a child 15 years or younger (OR older but disabled) and is away from home for work or study and receives an income for that work or study, the actual monthly expenditure on childcare incurred because that person is away from home may be deducted. Only deduct once for claimant OR partner.

Income from criminal legal aid income contribution order to be disregarded (Reg. 29)

Gross income minus the above deductions = disposable income.

Disposable income must not exceed £733 pcm.

The Disposable Capital Test

Assess assets as they exist on the date of assessment.

A partner whose means are to be aggregated must have their assets aggregated as well (see above for the definition of a partner).

If asset owned jointly with partner where a contrary interest exists, assume 50:50 split of equity unless some other split is documented.

  • UNLESS the asset is a joint bank account and client has access to entire amount, in which case include ENTIRE amount UNLESS there is some agreement to split the account 50:50, then include only half.

5. The disposable capital test

       i.     What is capital?

Capital is: savings, valuable property, interests in realty, bank loans, other loans.

Capital is NOT:

  • Household furniture
  • Clothes
  • Tools and implements of trade
  • Back to work bonus (s26 Jobseekers Act 1995) as far as payable by way of JSA
  • Certain payments under statute (social fund payments, arrears of payments under Children Act 1984 etc, social security payments etc. – see Lord Chancellor’s guidance)
  • Capital value of claimant’s business (self-employed)
  • Capital value of equitable interest in trust capital (although any disbursements of trust capital OR payments of trust interest should be counted)
  • Payment made from the Independent Living Fund (2006)
  • Payments made by virtue of Grenfell Tower victimhood (see above, and Reg. 40(2)

       ii.    Calculating disposable capital

Disposable capital is the value of capital minus certain “disregards”.

Generally, assets are valued as if they were sold on the date of assessment (Reg. 31).

Cars etc. in regular use have nominal NIL value – unless of exceptional value. In which case value then as above.

Client’s main dwelling must be included as per the following calculation:

  • value if sold today on the open market
  • MINUS the “MORTGAGE DISREGARD” – the mortgage or loan secured by a charge registered on the property (= up to maximum of £100,000)
  • MINUS the “SMOD DISREGARD” IF the dwelling is the Subject Matter of Dispute (= client’s share up to maximum of £100,000)
  • MINUS the “EQUITY DISREGARD” (= up to £100,000)

The mortgage disregard is max. £100,000 ALTOGETHER even if there are other properties, and for second and third properties etc. there is no equity disregard

Any particular asset should NOT be considered the SMOD unless a specific claim has by the point of assessment been made against it. If unclear, then assume NOT SMOD.

If client OR aggregated partner is 60 years or over, and together their disposable income is £315 pcm or less (EXCLUDING NET INCOME DERIVED FROM CAPITAL), then apply the following “pensioner’s disregard” to the client’s (aggregated) capital (Reg. 41):

Monthly disposable income (aggregated) EXCLUDING net income derived from capitalPensioner’s disregard
Passporting Benefit£100,000
£0 – £25£100,000
£26 – £50£90,000
£51 – £75£80,000
£76 – £100£70,000
£101 – £125£60,000
£126 – £150£50,000
£151 – £175£40,000
£176 – £200£30,000
£201 – £225£20,000
£226 – £315£10,000
Over £315.00Nil

A client is not allowed to intentionally deprive themselves of capital in order to qualify for legal aid. Capital disposed of must still be taken into account.

Once calculated and after applying the appropriate disregards, disposable capital must not exceed £8,000.

Other rules

If client is a child (under 18), his income and assets must be aggregated with his parent’s or guardian’s UNLESS inequitable to do so in all the circumstances. It would be inequitable to aggregate a foster parent’s income and assets with the child’s. Equitability is matter of discretion and judgement.

If an error is made in assessing somebody as eligible, Legal Aid must cease immediately that the error is discovered. If client has failed to disclose assets through dishonesty, they should be reported to the LAA. They will be charged according to the Director’s costs assessment guidance.

Clients are under a duty to inform the provider of any relevant changes in circumstances. A provider should then carry out a new assessment IF:

  • Some dramatic change in circumstances (capital receipt greater than £8,000 OR new income greater than the client’s gross income limit), OR
  • Some significant change in circumstances (capital receipt greater than £750 that takes client above capital limit OR increase in income over £60 pcm that takes client over gross income limit) AND the case is likely to last longer than 3 months after this change in circumstances takes effect.

Evidence

Satisfactory evidence of means must be supplied prior to assessment and kept on file (Rule 3.23 Standard Civil Contract Specification 2013).

For some clients, it will be impossible at the time of assessment to receive satisfactory evidence. If this is the case, you may still assess but must justify this decision in preparation for audit.

Discretion may be used by providers in evidencing small, secondary, amounts of income or capital that will not affect the assessment.

       i. Evidence of income

For controlled work, the assessment period is one month up to and including the date of assessment. Evidence of income is required for this period alone.

If impracticable to obtain evidence for this period directly, general supporting written evidence will be acceptable if reasonable. If over 6 months’ old, then further supporting evidence that the payments are continuing will be required.

If self-employed, use most recent available accounts to support client’s statement of drawings for the calculation period.

For benefits, evidence must show the type of benefit. If this is not available or unclear, provider may telephone the relevant agency whilst client is in attendance. This call must be written up with all details to be acceptable evidence at audit. Alternatively, obtain a letter from the relevant agency.

Relevant agencyBenefit
DWPIS; IBJSA; IRESA; UC
Jobcentre PlusIBJSA; IRESA; UC
Other paying agenciesGuarantee Credit
HMRCTax Credits
Income TypeRequired Evidence
Employed incomepayslip
Self-Employed income  Bank statement / working accounts or cash book showing drawings / tax assessment / set of accounts
State Benefits  Bank statement showing benefit type / original benefit notification letter up to 6 months’ old / most recent letter notifying change in benefit up to 6 months’ old
Expenditure TypeRequired Evidence
Income tax / NIpayslip / income tax bill
Housing costs (if >1/3 of client’s income)Rent book / tenancy agreement / copy of mortgage statement / bank statement if clear
Child care costs (professional)Agreement / contract / bank statement if clear
MaintenanceMaintenance order / cashed cheques / bank statements if clear

       ii. Evidence of capital

Generally, the client’s statement and signature on the application form is sufficient evidence.

However, some cases are unclear and require further evidence:

Capital TypeRequired Evidence
Savings accountsBank statement
Valuable property or realtyIndependent valuation
SharesShare certificate and independent valuation

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