Section 3 - Financial Eligibility Criteria across the Jurisdictions
All jurisdictions except New Brunswick have some type of official guidelines or cut-offs indicating income beyond which applicants are not normally entitled to legal aid. Depending on the jurisdiction, the provincial governments or the legal aid plans determine these guidelines. The guidelines vary by family size and some may vary by community size. Some jurisdictions use the LICO as their starting point for determining appropriate income levels, while others use social assistance payment levels. Assets, liabilities and expenses are also taken into consideration. And to further complicate the system, each jurisdiction differs in how strictly they adhere to any of their own regulations. In many instances, one is told "it depends" in answer to whether or not an applicant who is slightly above the guidelines or cut-offs will be issued a certificate. One area where all the plans are in agreement is that people on social assistance can qualify for legal aid.
Comparisons among the jurisdictions are somewhat difficult, given the amount of discretion and the complexity of some of the plans. This section of the report provides basic comparisons among the jurisdictions to illustrate their similarities and differences. While the inventory provides a more detailed summary of each of the plans, Table 3 shows "at-a-glance" some of the financial eligibility criteria.
One major area of difference among the legal aid plans is the way in which each plan defines income. Four of the 10 provinces use net income, while the others use gross income. (Net or after-tax income is a person's gross income minus income taxes; gross income is income from all sources, including government transfers.) Why use one instead of the other? One reason may be that Canada's tax system is progressive. Net income can be higher than gross income since individual tax credits and social assistance are not taxable. Some families with low income before taxes can be relatively better off - and not in a low-income situation - on an after-tax basis. We might expect that jurisdictions using net income would have lower guidelines overall, and it appears that this is generally the case. British Columbia, Saskatchewan, Ontario and Newfoundland and Labrador all use net income, and their guidelines range from $4,716 for a single person in Newfoundland and Labrador, to a high of $11,100 in Saskatchewan. Among the provinces using gross income as the criteria, the lowest income guidelines are in Québec, where an individual (or a single-person family) is capped at $8,870 of gross income, to a high of $14,176 in Prince Edward Island.
Each legal aid plan allows applicants to make different deductions from the calculation of their income. The most prevalent is the Child Tax Benefit, with six of the 10 provinces allowing this deduction. Other jurisdictions include tax credits, child care costs, the costs of medications, school or book fees, and child support payments. Québec allows the greatest number of deductions - including the Child Tax Benefit, tax credits for the care of the elderly, and social housing benefits. Allowing these deductions creates some flexibility in the income guidelines and may enable some families to meet the guidelines, despite any benefits they may have received from other social programs.
Each province's eligibility criteria also take into account other factors beyond just income. Family size, assets, liabilities and expenses can also be considered.
Most jurisdictions define family in the same way, using family size as the main criteria. A family can include a spouse (through marriage and common-law relationships) and dependants, who may be children or other individuals who rely on the applicant. In most jurisdictions, family size does not distinguish between one- or two-adult households with dependants. This implies that single-parent families are allocated the same income limits as couples. Nova Scotia, Newfoundland and Labrador and Québec base their guidelines on family type and family size. However, Québec consolidates the number of children at two, meaning that their income limit for a two-parent family with two children would be equivalent to a two-parent family with four children.
All jurisdictions have some form of assets test. An assets test can be used to deny eligibility to those above a certain income limit or to identify those who may be able to contribute some amount towards their legal costs. Some plans have clearly articulated cut-offs for assets, while others have tests that are discretionary. For example, in Nova Scotia, for the most part, eligibility is based on income, but if something appears to be irregular, they will investigate an applicant's assets before making any decisions. Provinces such as Québec have very clear definitions that identify by how much an applicant can exceed the assets limits, if at all. In all jurisdictions, an applicant can have some liquid assets, with ranges from $1,500 for an individual in Saskatchewan to a $5,000 maximum in Manitoba. Applicants with assets above these exemptions are denied legal aid coverage because it is felt that they have enough money to cover a lawyer's fees.
The plans also examine other types of assets, such as a house, property or a vehicle. All jurisdictions allow applicants to keep their family home and their car, provided these are not extravagant luxuries. But in some jurisdictions - such as Manitoba, Alberta or New Brunswick - applicants may be asked to take a lien out on their property. And once again, some jurisdictions clearly articulate the total amount they are assessing, while others do not. Jurisdictions also differ in what they consider to be a "modest" amount of assets that can be held. In British Columbia, the total equity in a car cannot exceed $5,000, while in Manitoba the limit is $10,000. Again, many of these assessments are at the discretion of the Legal Aid area director.
Differences among jurisdictions also exist in the way legal aid guidelines are viewed. For example, in Prince Edward Island, Newfoundland and Labrador and Ontario, the guidelines are considered to be a starting point for discussions; they are not used to refuse an applicant outright. Expenses and liabilities are heavily weighed into an assessment. For example, Newfoundland and Labrador examines whether applicants can meet their "basic needs" with the income they have. Ontario follows a similar principle. The systems in Prince Edward Island and Newfoundland and Labrador are discretionary, while Ontario's is clearly laid out. Legal Aid Ontario considers a basic allowance, a shelter allowance, boarder allowance and debt allowance, then an applicant's financial situation is assessed against these allowances. When combined, they can raise the eligibility limit for a single-person family from $7,212 under the income waiver, to $13,068 with the maximum allowance. Other jurisdictions such as Alberta and Manitoba indicate that they are also flexible in applying their guidelines, particularly when an applicant only slightly exceeds the guidelines or the assets tests.
Expanded Eligibility through Contributions
Jurisdictions can also allow applicants to have incomes above their guidelines if they agree to contribute towards the costs of the legal aid services provided. The plans may expect partial or full repayment of the legal costs. Alberta, Manitoba and Québec all have programs that allow applicants eligibility through their own contributions. In Alberta, once an applicant exceeds the relevant cut-off, they become eligible through partial contributions. In this way, the income limits for a single-person family in Alberta are extended from $13,900, to a maximum limit of $21,500. The amount of repayment depends on the applicant's ability to pay without causing undue hardship.
Québec's eligibility through contribution program requires an in-depth assessment of family size, income and assets. The limit for a single-person family is $12,640 under the expanded eligibility criteria, compared to a limit of $8,870 for non-contributory legal aid services. The amount that would need to be repaid ranges from $100 to $800.
Manitoba has a partial contribution level and a full contribution level. This system was created specifically to help low-income families that are "near poor" or "working poor." A single-person family can receive free legal aid if their income is below $14,000; they pay a partial contribution if they have an income of between $14,000 and $16,000, and they must repay the entire cost if their income is between $16,000 and $23,000. The full amount for repayment is meant to be lower than the costs would be to hire private counsel, because the tariffs for the legal aid lawyers are lower than those in the private sector.
Fees and Client Contributions
There are two types of fees used by the plans: administrative fees and client contributions. Administrative fees are not widely used. Manitoba and Québec have the only plans that require an application fee. Manitoba charges a $25 application fee and Québec requires a $50 refundable application fee for their contributory plan. Alberta has recently eliminated their application fee.
On the other hand, client contributions are widely used by many jurisdictions. Most are quite flexible, meaning that it "depends" on the applicant's ability to pay, which is often determined by the area director, depending on the jurisdiction. Applicants for legal aid normally do not have to pay at the outset in order to receive the service. Instead, they can enter into written agreements. British Columbia is the only jurisdiction that requires payment before a certificate is issued. The LSS uses a sliding scale based on an applicant's income, with a maximum amount of $100 that can be collected. Client contributions are not viewed as user fees per se, but British Columbia's system raises suspicions about whether it is simply a different kind of administrative fee.
How old are the criteria?
One last difference among the plans is the date when criteria were last updated. Québec and Ontario are still using criteria that were developed in 1995 and 1996, respectively. Prince Edward Island and Alberta have recently modified their criteria and are current as of 2001. The rest of the legal aid plans are using financial eligibility criteria updated between 1997 and 2000.
What are some of the implications for low-income families?
- There is no consistency across Canada. For example, a two-person family with a net income of $16,000 would be eligible for legal aid in British Columbia but not in Saskatchewan. A two-person family with $18,000 of gross income would be eligible for legal aid in Manitoba but not in Alberta, except under the program of expanded eligibility through contributions made by the applicant. Families with low income are therefore afforded different rights, depending on their province of residence. In our original example, an applicant would be given legal representation if they lived in British Columbia, but in Saskatchewan, they would either need to represent themselves or try to find legal counsel on their own. While many of Canada's social programs allow for provincial or regional differences, these differing legal aid plans present an interesting dilemma for the justice system. After all, the justice system is meant to treat everyone equally.
- It is obvious that there is no consistent definition of poverty or who constitutes the disadvantaged in Canada. For almost all the legal aid plans, only those who are very poor - that is, on social assistance or earning no money - are automatically eligible for free legal services. Several of the plans have questioned their criteria and have established eligibility through contributions. Québec's system was revamped in 1996 in order to allow for greater eligibility. Québec's system remains one of the strictest legal aid plans, and it is producing mixed results in terms of whether it serves those for whom it is intended. In an ongoing investigation into their expanded eligibility program, it was revealed that since 1996, 51,500 applications for eligibility through contributions were processed (all types of cases). Of those, 27,500 or 40% were denied. Among those who were denied eligibility, 20,341 or 75% were rejected because the applicants refused to pay the
contribution level. Essentially, single persons and lone-parent families were found to be the most affected by this problem. Manitoba's system is much more generous in terms of its limits, and the results appear to have been positive. A 1991 evaluation by the Prairie Research Associates of Manitoba's expanded eligibility concluded that the program was a success and that it was fulfilling its purpose of meeting the needs of the working poor.
- It is difficult to assess how the assets tests affect low income individuals. Some jurisdictions stated that this was not generally a problem because the applicants rarely had that much money or property. However, it does raise concerns as to whether it may or may not place undue hardship on those in low income.
- User fees and client contributions are also areas that have uncertain impacts on those in low income. According to exploratory research by Albert Currie, there may be a deterrent effect and instances of hardship as a result of client contributions and user fees. But, he recommends additional empirical research in this area to determine the effects on low income Canadians.
- If the legal aid plans use financial eligibility criteria to deny everyone but those who are economically disadvantaged, one would assume that their criteria must be kept somewhat current. Poverty is not static, yet the plans do not appear to have any automatic mechanisms to update their financial eligibility criteria.
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