Paragraph 1 of Schedule 1 to the Children’s Legal Assistance (Scotland) Regulations 2013 states that your client’s income is taken to be the income they may reasonably expect to receive (in cash or in kind) during the period of computation.

See below for examples of the most common types of income and how we treat them.

 

Employed clients

The best evidence of your client’s income is a wage slip for the month preceding the application.

However, if your client has only recently started employment we can accept other evidence including:

  • A recent letter of appointment confirming the salary
  • Other correspondence from an employer detailing income
  • A very recent P60

Your client may have more than one type of income or capital. Where this applies, we need to see verification of each income or capital source.

We cannot to accept a bank statement showing net pay received as the only allowable deductions from pay in children’s legal aid are:

  • Income tax
  • National insurance
  • Superannuation

Your client may also have other significant deductions made at source which may be for commitments not allowable when determining disposable income.

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:

Bank statements

If the applicant does not have access to online banking and is unable to provide the last three months’ consecutive bank statements, but they have some slightly older ones at home, we can accept these. The applicant will need to declare that their income and outgoings are generally still the same.

We can accept any other documentation they may have at home showing outgoings, such as mortgage approval letters, rent agreements etc.  If they cannot download and email these, they can take a photo on their mobile phone and attach it to an email and send it that way.

Payslips

If the applicant doesn’t have three recent payslips, but has older ones at home we can accept these. The applicant will need to declare that their salary has more or less remained the same.  As an alternative, if we can see their salary from their bank statement then we will use that.

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 Children’s A&A, to calculate the income in the previous 7 days, you should divide the payment by 12 weeks to calculate the weekly payment.

Net profit from self-employment or business

We use information from the latest set of accounts about the net profit your client has made.

 

We make the following adjustments to the net profit:

 

  • We add back notional overheads such as depreciation and provision for bad debts
  • We make a full allowance for any loans or hire-purchase commitments for business purposes

 

We require to see loan agreements and hire purchase contracts if your client is self- employed as most accounts only show interest paid on hire purchase, not the principal repayment. It will speed up processing the application if this information is sent to us along with the accounts.

Newly self-employed clients

If your client is newly self-employed and does not have a full year’s record, we can accept the figure your client draws each week or month from the business. We will ask for bank statements to support these figures in the absence of accounts.

If your client does not have accounts made up we will accept a copy of the information made available to HM Revenue & Customs and the tax assessment based on it.

Passported Benefits – automatic financial eligibility

No further assessment of financial eligibility, either income or capital, is required where your client, their spouse or partner receive one of the following state benefits:

  • Income Support
  • Income-based Jobseeker’s Allowance
  • Income based Employment Support Allowance
  • Universal Credit

We will, in the first instance, try to verify the payment of a passported benefit directly with the DWP.  If we are unable to do so, your client may need to provide documentary evidence confirming that a passported benefit is in payment.

 

State benefits

In terms of the 2013 regulations we are authorised to disregard payments of:

  • Income support
  • Income-related employment and support allowance
  • Income-based jobseeker’s allowance
  • Universal Credit
  • Disability living allowance
  • Personal independence payments
  • Armed forces independence payments.

These will be left out of account in our assessment. Although Schedule 1 does not specifically state that Pension Credits should be disregarded we will make a discretionary allowance to the value of Pension Credit payments which will also therefore be left out of account in our assessment.

All other state benefits will be converted to a monthly figure and included. This is done by multiplying the weekly benefit rate by 52 and dividing by twelve. Some benefits are paid 4 weekly and so the figure paid does not represent the monthly entitlement. In such cases, the figure is adjusted by multiplying by 13 and dividing by twelve.

Other sources of income

Pension

We will include all pension payments due whether state or work related.

 

Housekeeping

We will include payments made by partners for housekeeping only if your client and partner are living together but regard themselves as separated or where there is a contrary interest between them in the case.

Otherwise, we will aggregate the partner’s resources with your clients and ignore the sums they exchange as housekeeping payments.

 

Maintenance

This includes all alimentary and similar payments your client receives including those made through the Child Maintenance Service.

We only take into account payments received and not payments which have been ordered or agreed but are not being paid.

Voluntary maintenance is taken fully into account.

 

Child Maintenance Service

The annual figure for payments made to your client through the CMS is included.

 

Student grants and bursaries

We include any grant or bursary your client will receive but not any student loan they could get.

Deductions from income

Rent or mortgage

We make an allowance for the rent paid by your client, net of any housing benefit to which they are entitled in the month preceding the application.

If your client owns their house, we allow the monthly mortgage paid, including the premium payable for any related life assurance policies.

 

Council tax

We allow the monthly figure for council tax payable, subject to any reductions or council tax benefit applicable.

 

Allowances for partners

If your client is living with a partner, a statutory allowance is made to cover their dependency on your client. This figure is set by the Scottish Parliament and is uprated annually. This is usually the only allowance we can make unless the partner has a disability requiring extra expenditure from the joint income. The current statutory allowance can be found in the children’s keycard.

If your client has part-time care of a child, we apply a pro rata reduction to the statutory allowance.

 

Maintenance 

We make an allowance for maintenance payments to a separated spouse, partner or children, whether under a court order or voluntarily, and for payment of a maintenance assessment by the CSA.

 

Child care 

An allowance can be made for the cost of child care paid during the month preceding the application being made, provided your client is employed. This includes any after school club charges in the case of a school age child.

 

Debts

 An allowance can be made for payments towards debts shown to be made during the month before the application.

This could be for:

  • Bank loans
  • Credit card minimum payments
  • Fines
  • Payments made to credit unions

We would not include debts of utilities or mobile telephone costs.

This is not a definitive list of all potential deductions and we may consider taking into account other debt payments.

 

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