Whilst the Government has ended family legal aid for legal representation in all but a few areas, legal aid for family mediation continues. Furthermore, if you qualify for legal aid for family mediation it is free of charge and you will be entitled to receive a few hours free of charge with your solicitor to support you in the mediation process if they hold a legal aid contract.
Many people are not aware that as long as they receive less income than £31,884 pa and own less than £308,000 in terms of property and savings in dispute, they might qualify for legal aid. So, the message is clear, use mediation to resolve your finances and child arrangements after separation if at all possible, especially if it is free. There are of course many other advantages to mediation but they are not the subject of this article.
In this article, I attempt to guide you through the main qualification criteria and process for obtaining legal aid. It is not a substitute for a detailed calculation by you and the mediator but it attempts to simplify a complicated system (44 pages of guidance) and clarify some of the more confusing aspects of the new financial qualification criteria. For the sake of simplicity, it assumes that you are not living with anyone and, if you are, they are the person you are separating from. If not, it will be necessary to take into account their income.
Online help-First, check online whether you qualify for legal aid for mediation using the online calculator http://legal-aid-checker.justice.gov.uk/. This will ask you whether any domestic abuse has taken place because this may mean that you are entitled to legal aid for legal representation rather than for mediation and will need to see a solicitor. However, this is beyond the scope of this article
Financial evidence-Collect together the financial documents you will need to rely on to prove to the mediator that you qualify for legal aid before mediation starts. Use our document checklist (https://www.compass-resolution.com/cost/weblink). There is also a checklist on the back of form CLSMeans7. Spending an hour or so collecting the necessary paperwork to qualify for legal aid could save you over £1000 of mediation costs. This would be time well spent!
Income test– If you receive income support, income based jobseekers allowance, income-related employment and support allowance, guarantee credit or universal credit, you will automatically qualify for legal aid in terms of income but will still need to pass the capital test (para 5 below).
If you do not receive any of the benefits listed in 3 above, your income from all sources (apart from certain income like disability living allowance and attendance allowance which are disregarded) including salary (before tax is deducted) child benefit, pensions, maintenance, dividends, tax credits and benefits in kind must not exceed £2657 per month (this figure goes up if you have more than 4 children). From this you are allowed to deduct;
- your rent or mortgage,
- tax and national insurance,
- £285.13 for each child in your care,
- Up to £45 for expenditure connected with earning your salary such as travel to work costs,
- any maintenance you are paying (this may include expenditure you may be paying for your spouse’s benefit such as utility bills of the home you are no longer living in),
- child care costs.
The balance or what the Legal Aid Agency describe as ‘disposable income’ must not exceed £733 per month. We recognise that you are likely to have many more monthly expenditure items but these are not taken into account for the purpose of the legal aid calculation.
It is worth noting that the relevant month for calculation purposes is the month running up to the date of the mediation assessment meeting. If you qualify for legal aid for mediation but then, due to a change of circumstances whilst you are mediating, your income increases pushing your ‘disposable income’ above £733 per month you will not have to be reassessed.
Capital test-this means the value of everything of a capital nature including for example a bank loan or borrowing facilities that you have access. It does not, as you would expect, include cars, household furniture or tools of your trade. All this must not exceed £8000
The value of your home and any other properties require careful attention. In essence, if the property is or was you main jointly owned home, you need to carry out the following calculation:
Value of share in jointly owned property (very often 50% but not always)* £225,000
Less a maximum of £100,000 mortgage(s) or loan(s) –mortgage disregard – £100,000
=£125,000
Disregard £100,000 of equity- equity disregard (only for one property) £100,000
Result is you do not qualify for legal aid because more than £8000 =£25,000
SMOD- subject matter of dispute
*If, as in the above case, your share of the property is in dispute in the mediation you can disregard up to £100,000 of the value for the purposes of calculating whether you qualify for legal aid
Value of share in jointly owned property* £225,000
Less disregarded because subject matter of dispute SMOD -£100,000
=£125,000
Less a maximum of £100000 mortgage(s) or loan(s)- mortgage disregard – £100,000
=£ 25,000
Less disregarded £100,000 of equity- equity disregard (only for one property) -£100,000
Result is you DO qualify for legal aid. =Nil
You might think that it is already complicated enough so I do not want to complicate it any further by introducing other properties apart from pointing out that however many properties you have you are only entitled to a total mortgage disregard of £100,000, there is no £100,00 equity disregard in relation to second properties and the order in which you taking into account the disregards is important.
However, it is not all bad because as long as your jointly owned property in which you own a share is no more than £308,000 (ie a house worth £616,000 if you own a half share) and you have no other capital to take into account, you would still qualify for legal aid assuming that your ‘disposable income’ (para 4 above) does not exceed £733 a month.
Returning to where I started this article, it is definitely worth spending a few minutes carrying out your calculation online and, if after that you think you might qualify for legal aid it is definitely worth spending an hour or so collecting your financial evidence to take to the mediator who will check your calculation and ensure that your mediation will be free of charge.
On a final note, if you qualify for legal aid for mediation, you will also be entitled to a few hours of free advice from your solicitor who will support you through mediation. However, they must have a contract with the legal agency to be able to provide you with this help.
So, good luck…