Appeal applications where financial eligibility test to be applied and information on assessing a client’s disposable income

This section explains:

• The circumstances in which we need to apply a financial eligibility test.
• How the test is applied in an application for criminal legal aid for an appeal.
• The different types of income we have to assess.
• The outgoings taken into account.
• How we calculate disposable income.
• The documentation required.

We suggest that at the earliest possible stage in a case where there will be a financial test, because legal aid was not previously in place, that you obtain the client’s financial information and signature on the declaration in anticipation of submitting the full appeal application if the case passes the sift process.

We have to decide whether a client is financially eligible where they did not have legal aid for the case at first instance. For example if:

• They were not represented.
• They were receiving ABWOR.
• They were represented by the duty solicitor.
• They paid for representation privately.

Undue hardship test

The statutory test is whether the client’s financial circumstances are such that the expenses of the appeal cannot be met without undue hardship to them or their dependants. This test will be applied in the same way as for initial proceedings, except that we will have regard to the costs of the appeal instead of the defence.

Application by “authorised person” – section 25AA

In an application by an authorised person, their means are normally taken into account.

However, where the authorised person is the deceased’s executor, only the deceased’s estate is taken into account and the beneficiaries of that estate are treated as the dependants for the purposes of the undue hardship test.

Leave to appeal required

When leave to appeal is required, the expenses to be taken into account are those of the application for leave to appeal.

If leave is obtained and legal aid is granted, we may carry out a further hardship test before the date of the appeal hearing. We will only do this if there has been a change in the client’s financial circumstances [section 25 of the Legal Aid (Scotland) Act 1986]. The legal aid certificate will include a special condition that:

• Your client must tell us about any improvement in their financial circumstances .
• No further work may be carried out until we are satisfied that the client is still financially eligible.

The following sections deal with the information we require and the application of the financial test in the context of different financial circumstances.

Complete all parts of the online form as appropriate.

Providing all the information requested on the online application should enable us to consider the application without delay and avoid the need for us to continue the application for further information or documentation.

We do not normally require documentary evidence that your client is receiving state benefits.

However, with all clients we may take steps to verify the financial information they have given. If we find they have wilfully given us false information, or not made a full disclosure, we will consider reporting the circumstances to the procurator fiscal for prosecution.

Before we can make legal aid available, clients must provide proof of their income and outgoings.

Usually, the easiest way to do this is to provide a recent copy bank statement, marked to show income and outgoings. If their income is not paid into a bank account, we can accept a recent copy wage slip or a letter from an employer.

If the client has more than one bank account, we will require a recent copy statement for all accounts.

Self-employed clients

If a client is self-employed, we can accept:

• The most recent self-assessment tax return.
• A recent copy bank statement if this shows their weekly drawings.
• A letter from the client’s accountant confirming their weekly drawings, if the above documents are not available.

The best way to provide proof of payment of outgoings is usually to provide a recent copy bank statement. However, if any of the outgoings do not appear on the bank statement alternative proof of payment is required.

If the applicant has more than one bank account, we will require a recent copy statement for all accounts.

A client will automatically qualify on income if they are in receipt of one of the following “passport benefits”:

• Income Support
• Income related Employment and Support Allowance
• Income based Job Seekers Allowance
• Universal Credit

We can check receipt of these benefits using our automatic DWP link. If the link is able to confirm receipt of a passport benefit, we will not require any other evidence of this.

Benefit in partner’s name

If the passport benefit claim is in the name of the partner, our automatic DWP link can check this but we will require the partner’s:

• Forename
• Surname
• Date of birth
• NI number

If our link is unable to confirm receipt of a passport benefit then we will require some form of proof of payment such as a recent copy bank statement or a recent copy award letter from the DWP.

Some non-passport benefits are dis-regarded and, therefore, are not included as income in our calculations. These include:

• Disability living allowance
• Personal independence payments
• Attendance allowance
• Carers allowance
• Incapacity allowance
• Pension credit
• Payments made from or in connection with the Windrush Compensation Scheme
• Payments made from or in connection with Scottish Child Payments
• Child Disability Payments (CDP)
• Short Term Assistance Payments while CDP award is under appeal.

Our automatic DWP link is not be able to check for receipt of these benefit payments, so proof of receipt of the benefit is required. This could be a recent copy bank statement or an award letter from the DWP.

We consider the following items as income:

• Pay or sick pay from work (including overtime, commission, bonuses, but after deducting income tax, national insurance, student loan, CSA payments or other such deductions.
• Drawings/net profit if self-employed.
• Private pension.
• Any other state benefits.
• Student grant or bursary.
• Maintenance payments received.
• Money from all other sources.

Where the client lives with a spouse/partner, you do not need to declare partner’s income if:

• They have a contrary interest in the case (complainer, co-accused or a crown witness).
• Their net pay is less than the current upper income limit of £11,540 per annum or £222 per week.

We consider the following as outgoings:

• Rent or board and lodgings
• Mortgage (including any endowment or life insurance policies linked to the mortgage)
• Council tax/water charges
• Regular loan re-payments
• Minimum monthly credit card/store card payments
• Maintenance payments
• Court fines
• Car insurance and car tax payments
• Other reasonable outgoings

For the outgoings, we will consider the full amount of the outgoings if the spouse or partner has weekly income below £222. Where the spouse or partner is in receipt of weekly income above £222, we will make an allowance for half of any declared outgoings.

Where the client lives with a spouse/partner and or any dependant person (adult other than partner) or child, a standard allowance is given for each dependant at the rates given in the current advice and assistance Keycard.

The income figure remaining, after any allowances and outgoings have been deducted is the client’s disposable income.

Client’s disposable income below limit

If the remaining figure is less than the current weekly income limit of £222, then the client qualifies on disposable income.

Client’s disposable income above limit

If the figure exceeds £222, we look at the nature of the appeal involved before we can determine whether it would cause undue hardship for your client to pay for their own legal costs.

In considering the undue hardship test, we look at factors including:

• The likelihood that expert evidence would be required.
• Legal complexities involved.
• Any other aspects of the case likely to lead to a need for significant preparation time.

If the client has no income, you must provide an explanation about how they are financially supported. If the client has a bank account, a recent copy statement will be required in support of their financial position.

Covid-19

For the period of the Covid-19 restrictions, where applicants may have difficulties in getting wage slips or bank statements from their bank, they can download their bank statements or screenshots and send them to us by email. We can also accept mini statements from the cash machine.

We are aware that not everyone has access to online banking and that banks are only dealing with priority matters by phone, and therefore it may not be possible for applicants to contact their banks for copies of statements. We will discuss with applicants what may be possible, including the options set out above. If there is no way of providing any verification, we’ll take the following approach:

If the applicant has provided verification in another application in the last six months, we can check this and use this as verification. The applicant will need to declare that there has been no change in their circumstances.

Granting legal aid with conditions

We can grant the application with a condition where we have taken all steps with the applicant and where there is no or insufficient verification.

The condition will be that the applicant provides financial verification to demonstrate their eligibility at the date of grant as soon as it becomes available to you/your client and in any event within the next three months if possible.

Failure to provide the verification could result in the end of the grant of legal aid, depending on the aid type.

How payments to self-employed people during Covid-19 affects eligibility for legal aid

 The Scottish & UK Governments have offered financial support to self-employed people whose business is affected by Covid-19. This update describes how these will be treated for the purposes of assessing eligibility for legal aid.

Scottish Government Business Support Scheme 

This is a one-off grant of either £10,000 or £25,000 (linked to the non-domestic rates system) paid through local authorities.

To assess eligibility for legal assistance, this payment will be disregarded in all aid types.

UK Government Self-employment Income Support Scheme (SEISS) 

This is the support put in place for the self-employed as they are ineligible for the Coronavirus Job Retention Scheme. Applicants will get a taxable grant which will be 80% of the average profits from the last three years, up to a maximum of £2,500 per month for 3 months. It will be paid directly into an individual’s bank account, in one instalment, expected to be by June. A second grant can be claimed in August 2020. For the purpose of assessment of eligibility for Universal Credit, SEISS is treated as a receipt for the purposes of calculating the claimant’s self-employed earnings.

How to treat the SEISS payment in financial eligibility assessments

• To assess eligibility for legal assistance, these payments will not be treated as capital for any aid type.
• The payments will be treated as income. It will be included in the calculation of net profit and the applicant’s drawings. It is the drawings figure which will be used to assess a self-employed applicant’s disposable income.
• For all aid types, the income should be apportioned over the three month period the SEISS grant is intended to cover.
• As with all income, proof of payment should be provided.

For Criminal Appeals legal aid, in cases where we need to apply the Undue Hardship test, we will treat the payments as income to allow us to calculate the applicant’s weekly self-employed earnings. In the application, you should enter the amount received, divided by 12, as weekly drawings.