Changes to the means test

Changes to the means test

Friday, 14 September 2018

On 1 October 2018, we will be introducing the following 13 changes to the means test. These changes respond to the means test review recommendations to establish a fairer and more easily understood means test and ensure our services are properly targeted to those most in need.

What are the changes

Expenses and assets

  1. An applicant will no longer be asked whether they have received, or expect to receive, a lump sum amount of money. Victoria Legal Aid (VLA) will still require the applicant to inform VLA or their lawyer if their financial circumstances change.

Financially associated persons and dependants

  1. The definition of ‘financially associated person’ will be narrowed to an applicant’s spouse or de facto partner. A de facto partnership will be defined as a relationship between two parties who have been living together for a period of no less than 6 months.
  1. An applicant’s spouse or de facto partner will be asked for the same information that is asked from the applicant to establish their financial circumstances. VLA will ask for 3 months’ worth of bank statements where they have higher assets, copy of Centrelink benefits card; and pay slip or bank statements where employed.
  1. An applicant’s spouse or de facto partner will be excluded from the means test where they are:
  • a person with an interest contrary to the applicant’s interest in their legal proceedings
  • a person who is legally married or in a de facto relationship with the applicant, where they have recently separated
  • a person who resides overseas, is not earning any income and does not have assets
  • a person in prison or detention who does not have assets
  • a person who is alleged to be a victim of family violence by the applicant.

Contribution and debts

  1. The Debt Policy has been rewritten to provide better guidance about how VLA deals with initial contributions and debts. The Policy includes the factors that should be taken into consideration when waiving or varying a contribution. The Policy also provide examples of where a contribution may be reduced or waived as a result of financial hardship.
  1. Secured contributions will be indexed annually to maintain the real dollar value of the contribution. This will keep the contribution consistent with any increases to cost of living. Indexation will be measured by the consumer price index (CPI). Indexation will only apply to contributions secured after 1 October 2018.
  1. An automatic repayment schedule will apply for unsecured asset contributions. This means that contributions imposed on assets can now be paid over a 12-month period instead of as a lump-sum. If an applicant has an income and asset contribution, these amounts will be combined in one repayment schedule.

Exemptions and waivers

  1. A complete waiver of documentary proof of means will be available for applicants who:
  • are experiencing homelessness
  • are fleeing from or experiencing family violence
  • reside in a remote area
  • are an Aboriginal or Torres Strait Islander.

The means test will still apply to these groups of people.

Guidance and support

  1. We will build an online means test calculator to provide potential applicants and lawyers with guidance about potential eligibility for legal assistance. The calculator will:
  • idicate whether someone will be eligible for assistance with or without a contribution
  • advise an applicant if they are unlikely to be eligible for assistance
  • provide VLA with anonymised data about who is excluded from our means test to help us make improvements to the test in the future.
  1. We will publish guidance of when our means test results should be waived where an applicant is ineligible because of their income or assets. This is contained in the VLA Handbook for Lawyers and clarifies that VLA has discretion to grant aid when the applicant is otherwise ineligible and that such discretion may be exercised in exceptional circumstances, including:
  • where an applicant does not satisfy the income test, but there is insufficient time for the applicant to raise the funds (including by borrowing money) to pay for a lawyer privately
  • where an applicant does not satisfy the assets test but is unable to access these funds in time to pay for a lawyer privately.

       Where discretion is exercised in favour of an applicant, assistance will generally be granted with a full contribution.

  1. The means test section in the VLA Handbook for Lawyers has been rewritten in plain language.
  1. We will provide training to support workers in the community sector about the eligibility requirements to get a grant of legal aid.
  1. We will publish when and how often our means test is waived as well as a guideline to assist how discretion should be exercised.

More information

For more information on the means test review, read our public report, or email meanstestreview@vla.vic.gov.au.

Thank you to all those who took part in the consultations and helped inform our means test review.

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