LSC Financial Eligibility

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In August 2005 the Legal Services Corporation made significant changes to its longstanding criteria for determining client financial eligibility.

Among the most important changes are the following:

  • A client is eligible for services without regard to any asset or income test, if the household's income is solely derived from a very-low income cash aid government program, such as SSI, CalWORKs (TANF) or General Assistance/General Relief (GA/GR). Under this exception, the client can be helped on any matter.
  • If assisting the client to "maintain" a "government program for low income individuals or families," then the client can be assisted without regard to any income test. (The asset test still applies. Such a program does not have to be cash aid, nor limited to the very-low income. For example, it can include persons of low or moderate income who are trying to keep from being evicted from a Tax Credit property (http://www.nlihc.org/advocates/lihtc.htm). This exception only allows you to assist the client to maintain that government benefit.
  • The general rule for determining income eligibility is that you first apply the LSC income ceiling to the household's gross income, without applying any exceptions or deductions. But self-employment income is treated differently than other employment income. With self-employment income, you first deduct business expenses from gross income and then use that figure to determine whether the household fits within the LSC income ceiling.
  • When applying the "over-125%-but-not-more-than-200% of the poverty level" factors to make an applicant eligible, you must document on the intake the factor(s) justifying the exception to the income ceiling. Such factors are:
1. Assisting the applicant to obtain a low income government benefit; or
2. Assisting the applicant to obtain or maintain a disability benefit; or
3. One or more factors relating to seasonal variations in income, other significant factors that affect the applicant's ability to afford private legal assistance, or various expenses.
The allowable expenses are not new changes except for two notable ones: Employment taxes and rent. For instance, if an applicant's gross income is over 125% but under 200% of the guidelines, you may simply document the applicant's after-tax deductions (i.e., net income) to make the applicant eligible.
  • Domestic violence: Count only the income and assets of a victim of domestic violence, not any income or assets held separately or jointly by the abuser or anyone else in the victims's household with the abuser.
  • Except for waiving the asset ceiling for "unusual or extremely meritorious" cases, staff may document the exceptions to the income ceiling on the intake without getting prior approval for the Managing Attorney.
  • As long as a client uses any vehicle (auto, motorcycle, etc.) for "transportation," it is exempt as a countable asset. Use of the vehicle for transportation does not have to be work-related.

Related Resources:

Original entry by Brian Lawlor
Legal Services of Northern California (http://www.lsnc.net/)

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