Means Test

Legal Services assesses an applicant’s means by reference to the applicant’s–

1. income;

2. assets; and

3. lifestyle.

Where an applicant provides documentation indicating they are in receipt of full Centrelink benefits the income component of the Means Test will be satisfied.

The Means Test is not applied to a child applicant.

The Means Test must continue to be satisfied throughout the grant of aid.

In assessing an applicant’s means, the income, assets and lifestyle of any financially associated person is assessed in the same manner as the income and assets of the applicant.

The Means Test will not be satisfied if–

1. an applicant or a financially associated person has dissipated funds without making provision for the payment of legal expenses, or
2. the amount of the contribution to be paid by the applicant (determined by reference to the income and assets available to the applicant and the financially associated person where appropriate) is more than the value of the grant of aid.

Point (a) and (b) above does not apply to a matter the subject of the Criminal Law (Legal Representation) Act 2001. In these matters, the Means Test is only relevant to determining the contribution to be paid by the applicant.

The application of the Means Test may determine that the applicant–

1. is eligible on means, in which case, if the matter comes within the Jurisdictional Guidelines Test and meets the Merit Test and Forum Test, the application for aid will be granted, subject to the payment of the calculated contribution,
2. is not eligible on means but may become eligible once an assessed sum has been spent on legal fees, in which case the applicant should reapply when able to provide proof of this expenditure, or
3. is not eligible on means and will not become eligible, in which case the application will be refused.

Income Test

To determine the income level of the applicant (other than an applicant in receipt of all full Centrelink benefits), all funds received by the applicant and any financially associated person are considered, including–

1. pensions, benefits and allowances from any source,
2. income from any paid work, including overtime, shift and penalty pay,
3. commissions and allowances,
4. royalties, licence or copyright fees or other proceeds of intellectual property,
5. periodic receipts such as dividends, interest, instalments of debts and the like,
6. board or rent received,
7. child or spouse maintenance received,
8. lump sum payments such as compensation (including workers compensation or other insurance payments), superannuation, annuity payments, retrenchment pay or like sums where the applicant asks for it to be treated as weekly income (unless requested, it will normally be treated as a lump sum). For example, where neither the applicant nor a financially associated person is employed, and the payment has resulted in a period of preclusion from Centrelink entitlements, the applicant, for the duration of the preclusion period, is deemed to be earning weekly earnings from the lump sum averaged over the preclusion period, and
9. lump sum child support or spouse maintenance received by the applicant if the applicant is receiving a pension or benefit at a reduced rate due to receipt of this sum.

The only funds received but not considered in determining the income level of the applicant are–

1. the base rate of Family Tax Benefit Part A (although Family Tax Benefit Part A supplement is treated as income),
2. a personal injury lump sum payment, not including any income maintenance component, or
3. a payment received under the National Redress Scheme.

Allowable deductions are made from the applicant’s income to determine the applicant’s assessable income. Allowable deductions are amounts paid by the applicant or a financially associated person in–

1. income tax,
2. Medicare levy,
3. rent or mortgage on the applicant’s or a financially associated person’s place of residence,
4. reasonable business expenses and overheads incurred in earning a living (that an expense has been allowed as a tax deduction is not conclusive for this purpose),
5. council and water rates on the applicant’s or a financially associated person’s place of residence,
6. childcare costs necessary to enable the applicant or a financially associated person to work or study,
7. supporting dependents 
8. child support payments made in relation to children who do not live with the applicant, orthe base rate of Family Tax Benefit Part A (although Family Tax Benefit Part A supplement is treated as income),
9. spouse maintenance payments.

The amount deducted is the actual amount spent on an item.

The deduction for dependents is–

1. first dependent – the difference between the Head in workforce, cost other than housing, single parent plus one figure and Head in workforce, cost other than housing, single person figure, from the Henderson Poverty Line tables,
2. second and subsequent dependents – the difference between the Head in workforce, cost other than housing, single parent plus two figure and Head in workforce, cost other than housing, single parent plus one figure, from the Henderson Poverty Line tables.

Once the assessable income of an applicant has been determined, a sliding scale is applied to assess whether the applicant meets the income test for a grant of aid and, if so, to determine the contribution that is to be paid by the applicant.

The sliding scale is determined by reference to the Head in workforce, cost other than housing, indicator set out in Table 1 of the Henderson Poverty Line tables, published by the Melbourne Institute: Applied Economics and Social Research from time to time.

Asset Test

The asset level of an applicant is determined by calculating equity in all assets (other than excluded assets).  An allowable asset amount is deducted, and a sliding scale is applied to the balance to determine whether the applicant meets the assets test for a grant of aid and, if so, the contribution payable.

The allowable asset amount is a figure set and updated in accordance with the weighted average of the Consumer Price Index/Average Weekly Earnings.  The amount varies, depending on whether a person is single or has dependents.

When applying for a grant of aid all assets of the applicant and any financially associated person must be declared. An asset includes–

1. any item in which the applicant or a financially associated person has a legal, beneficial or equitable interest, and includes items not registered in the person's name,
2. a lump sum payment received by the applicant or a financially associated person that does not prevent the applicant drawing a Centrelink benefit such as compensation (including workers compensation or other insurance payments), payments from accessible superannuation funds, annuity payments, retrenchment pay or like sums.

If an asset is owned jointly or in common, ownership is apportioned accordingly.

The assets of a financially associated person are disregarded if–

1. the applicant is separated from the financially associated person, and it is not reasonable to expect any support,
2. the financially associated person has a contrary interest in the matter,
3. disclosure of the application for legal assistance could damage the applicant's interests, or
4. the financial association should be disregarded for some other reason.

Assets that must be declared but that are usually excluded from determining the asset level of the applicant (excluded assets) are–

1. ordinary household furniture, clothing and personal effects,
2. tools of trade, unless of exceptional value,
3. equity in a motor vehicle, up to a maximum of $30,000, per vehicle per adult driver in the household (excluding collectable vehicles),
4. equity in the place the applicant or financially associated person lives, including land on which a home is being built in which the applicant or financially associated person intends to live, and
5. equity in a farm or business that is the main source of income, up to a maximum based on assets limits set under the pension assets test.

An asset that would normally be excluded may be taken into account if it is likely to be sold during the proceedings or will otherwise yield funds from which the applicant could pay for legal representation.

Equity in real estate will give rise to a statutory charge if costs exceed $2 500.

Lifestyle Test

The lifestyle of an applicant and any financially associated person may be considered when determining the Means Test. If the lifestyle of the applicant or a financially associated person is such that it is considered that private legal representation could be afforded, the application may be refused.