A report published by the Law Society today (20 March 2018) shows that people on low incomes are being excluded from claiming legal aid and thus prevented from accessing justice. The Society is calling on the government to restore the means test for legal aid to its 2010 real-terms level. For the past eight years, the limits have remained static, whereas they were previously raised annually in line with inflation.
Priced out of justice? Means testing legal aid and making ends meet
was paid for by the Law Society but produced independently by Professor Donald Hirsch of Loughborough University. He found that many people who are eligible for part of their legal costs to be paid via legal aid, but who must pay the remainder themselves, have incomes that are too low to meet the minimum income level that researchers believe is necessary to maintain a ‘socially acceptable standard of living’.1See the Minimum Income Standard (MIS), calculated by the Centre for Research in Social Policy at Loughborough University on behalf of the Joseph Rowntree Foundation.
For example, people on incomes at the maximum level at which legal aid is available typically have disposable earnings between 10 and 30 per cent too low to allow for a minimum budget for living expenses. This means they are unable to take advantage of the legal aid they could receive as they can’t afford to pay the remainder of the costs, which they are required to meet themselves, thus being denied vital help to address potentially life-changing legal issues.
The report sets out the following findings (page 4):
•Individuals with gross income above the £2,657 a month limit could generally afford to contribute a substantial amount to legal costs. However, some people with this level of gross income who are supporting families have incomes below the minimum, mainly because gross income includes tax credits and benefits, which contribute to meeting the cost of additional family members.
•The disposable income limit of £733 a month (after deducting tax and making allowances for housing and additional household members) is a more stringent threshold, excluding people from all types of household at incomes that put them below the Minimum Income Standard. In some cases people well below the standard can get no legal aid; for example, a couple with one child has 28% less than they require for MIS at the income at which they are excluded from legal aid.
•Those with above £316 a month in adjusted disposable income may receive legal aid but must contribute to their costs. This excludes almost all households where anyone works, and is roughly equivalent to the level of means-tested benefits, whose recipients receive full legal aid regardless of income.
•Even those on the lowest incomes who are eligible for legal aid are excluded if they have savings or assets worth over £8,000, or in some cases £3,000. Those with this much in the bank could pay for some legal costs without affecting their current ability to maintain a minimum living standard. However, the means test also takes account of the value of people’s homes. As a consequence, home owners who are not working may be excluded from legal aid even though they have no realistic options for paying for legal costs.