Hon Phil Goff Minister of Justice

10 May 2005

Budget 2005

New legal aid criteria extends eligibility but also requirements to repay

Legal aid eligibility income thresholds, which have not been changed since 1969, will be amended under a Legal Services Amendment Bill introduced to Parliament today.

"This legislation will restore to a wider range of lower income New Zealanders the ability to afford legal representation for civil, family and criminal matters," Justice Minister Phil Goff said today.

"It is based on the principle that access to justice ought not to depend on the ability to pay.

"The changes will increase the number of New Zealanders who are potentially eligible for legal aid to 1.2 million, up from the current 765,000. The number of legal aid grants made is expected to increase to 85,000, up by 25,000.

"Income thresholds for civil cases will be based on gross income and adjusted according to family size. A family of two adults and one child, for example, would meet the criteria on earnings up to $36,371. The current equivalent level is $19,060. Income thresholds will also be inflation-indexed in future.

"The new criteria are based on eligibility criteria for the current community services card. They will be fairer to lower income working families who are currently disadvantaged in relation to those dependent on benefits. Under current criteria, benefits are not considered as income.

"The additional cost of the new level of grants, when it comes into effect in 2006/2007, will be around $14 million in its first year, and around $21 million a year subsequently. This will be provided for in this year's Budget estimates.

"With the major public investment in legal aid to ensure access to justice, it is equally important that proper safeguards are built into the system to ensure that spending is justified.

"New merits tests are introduced, for example, to ensure that in family court matters regard is given to whether there has been previous proceedings in the matter, to see whether the applicant has been excessively litigious.

"There must be reasonable grounds for taking or defending proceedings, with special regard for vulnerable persons such as victims of domestic violence, or children.

"For criminal legal aid, a new test will be introduced that places emphasis on likelihood of imprisonment, the complexity of proceedings, whether proceedings involve a substantial question of law, and whether the individual is able to understand them without assistance.

"To extend eligibility for aid to a wider section of the population and to ensure that recipients are more mindful of the cost of proceedings, a new repayment and debt management regime will also be introduced.

"Under the new legislation, a higher proportion of recipients will be required to repay some or all or their grant. Those in this category will increase from 8000 currently to 22,000, with the value of repayments rising from $10.8 million to $24.6 million per year.

"This will encourage those seeking legal aid who can afford to part-fund or repay their costs to weigh the benefits of proceeding with their case in the same way as people who have to meet their own legal costs in full.

"Criminal and civil legal aid recipients will now be treated the same for repayment purposes, which will result in more criminal legal aid recipients contributing to their legal costs.

"Costs will be able to be awarded against legal aid recipients, in particular where there has been deceit, misleading behaviour, or misconduct in the proceedings causing the other party to incur unnecessary costs. "Overall, the new system will be fairer, both in ensuring access to justice does not depend on an ability to pay, as well as ensuring that people seeking public assistance genuinely need it and will contribute to the cost," Mr Goff said.

ENDS

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