Unified means test for legal help

In a continuing series, Richard Miller provides answers to some of the common questions raised by legal aid practitionersQ What is happening to the means test and eligibility for public funding?A This is such an important issue that I am dedicating the entire column to the answer.

It is all change for the means test from December 2001.

The existing means tests are being scrapped and replaced with a unified means test for all levels of funding.

At the same time, there is a substantial increase in the eligibility level for legal help.The means testThe new means test switches focus from weekly figures to monthly.

It has a gross income cap of 2,000 per month.

Anyone whose income exceeds this level (including all income that would fall to be disregarded in the application of the means test) is excluded from eligibility.Passporting remains in place for those in receipt of income support or income-based jobseekers' allowance.

As now, for legal help, the passporting applies only to income eligibility.

Working families tax credit will no longer provide any form of passporting.For those with less than 2,000 per month, a smaller number of allowances against income are available.

Certain state benefits are disregarded, including for the first time invalid care allowance and a number of other more obscure benefits.

Tax and national insurance are also discounted, and an allowance is made for any maintenance paid.Rent or mortgage payments, including payments/premiums for any endowment policy or other 'instrument which will be used to repay the capital sum borrowed' can be deducted, but for a single applicant, there is a cap of 545 per month.You will no longer be able to take account of all applicant's work-related expenses.

Where the applicant is receiving a salary, there will be a fixed allowance of 45 per month, in addition to which all actual childcare expenses can be deducted.

All allowances for other work expenses, pensions and any exceptional expenses have been abolished.EligibilityThe income eligibility level for legal help has been increased dramatically.

It is now set at a disposable income of 601 per month, and there are no contributions.

The capital limit is increased to 3,000, but allowances against capital for dependants have been abolished.For certificated levels of service, the income eligibility limit is 683 per month.

There is no contribution for family mediation or help with mediation.

For other certificated levels of service, a contribution is payable.

The monthly contribution is one quarter of income between 260 and 380, one third of income between 381 and 505, and one half of income between 506 and 683.

The effect of this is to reduce contributions at the lower end of the scale and increase them at the higher end.The capital eligibility level is 8,000.

As at present, a contribution from capital must be made of all capital in excess of 3,000 or an amount equivalent to the expected cost of the proceedings if less.Carrying out the testAs at present, practitioners will be required to apply the means test for legal help.

A more extended means form will have to be sent to the Legal Services Commission (LSC) to carry out the test for certificated work, even though it is the same test that will be applied.When carrying out the test, practitioners will need as now to obtain evidence of income.

Because of the increase in eligibility, there will be more cases in the future where the client is not in receipt of a passporting benefit, where evidence of wages or other income will be required.There is some clarification of the rules for the self-employed, although it will not necessarily be easy applying the test to them.

On the capital side of the calculation, it is confirmed that the value of the business itself is not to be taken into account.

For the income calculation, the basic rule is that the last month's drawings should be used, although if the drawings appear low, an attempt will have to be made to find the 'normal' level of drawings, and to consider whether anyone is providing assistance in kind or payment of bills which would also need to be taken into account as income.Where an applicant knows that for reasons outside their control the following month's income will be less than for the month under consideration, it will be acceptable for the solicitor to advise the client to wait and to reapply for funding in the following month.

Obviously care must be taken not to assist in any intentional deprivation of resources, but for those with erratic income this could provide a useful route to funding.Practitioners will not as a matter of course be required to obtain evidence of expenditure claimed by the client.

The client's declaration will generally be sufficient.

However, where the housing costs or childcare expenses claimed by an applicant appear unduly high, some evidence will be required.

The guidance is expected to set clear parameters as to what constitutes 'unduly high'.

Similarly, the present rule that the client's declaration of his capital is sufficient evidence will be retained.One benefit of unification of the test is that where an application is made for an emergency certificate, the means test filled in by the applicant for legal help will suffice, and no additional means form will be required with the emergency application, although the ordinary means form will be required with the substantive application in the normal way.It is proposed that practitioners should also carry out the means test for those limited fields of magistrates court family work in which there is a devolved power to grant full representation.

If the client's disposable income exceeds 259 per month, a contribution will be payable from income.

The solicitor will be required to collect the contribution, and will be able to claim from the commission only the costs net of the contribution due - whether or not it has been paid.

Recovery of unpaid contributions will be the practitioner's responsibility.FormsA number of forms are being changed, including the MEANS1 (means form for certificated funding), L17 (Statement of Earnings), CW1 and 2 (controlled work forms) and CLS APP6 (fax emergency application).

There is also a new MEANS6 form for the supplier to complete to determine financial eligibility for legal help and in any other cases where the supplier is responsible for carrying out the means test.

Perhaps surprisingly, this latter form runs to only two sides of A4 and appears reasonably straightforward to complete.Additional informationThe new forms and draft guidance are available to download from the LSC's Web site: (www.legalservices.gov.uk/index.htm) in the civil consultations archive under the heading 'Community Legal Service - changes to the financial conditions for funding by the commission - July 2001'.

Practitioners should take a look at them - but do not forget that these documents were the drafts for consultation and there may be some amendments before the final forms and guidance emerge.l There will be an opportunity to discuss issues of concern in the field of legal aid, including the new means test, the specialist quality mark and contract compliance audits, with Baroness Scotland, Steve Orchard, and others of influence at LAPG's annual conference in Manchester on 12 October.

For details, contact Barbara Moody, tel: 020 7336 8565 or by e-mail to barbara@lapg.co.uk.l Questions for this column should be sent to Richard Miller at 93 Turnmill Street, London EC1M 5TQ, DX 53339 Clerkenwell ore-mail: richard@lapg.co.ukRichard Miller is the director of the Legal Aid Practitioners Group and a Law Society Council member.

He was previously the franchise liaison officer for a small firm of solicitors that had franchises in crime, family, welfare benefits and personal injury.

Mr Miller cannot answer questions other than through this column, unless they are from members of the Legal Aid Practitioners Group