Section 1611 - Financial Eligibility

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The following is a copy of the program policy for implementing 45 C.F.R. § 1611 (http://snipurl.com/p3r2) in use by Legal Services of Northern California (http://www.lsnc.net/) (as of April 2006).

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A. Purpose

Legal Services of Northern California, Inc. (LSNC) adopts the following Financial Eligibility Policies for individuals and groups who are provided legal assistance supported in whole or in part with funds received from the Legal Services Corporation (LSC).

Only individuals and groups determined to be financially eligible under these policies and 45 C.F.R. § 1611 (http://snipurl.com/p3r2) of the LSC Regulations may receive legal assistance supported in whole or in part with LSC funds. These policies do not apply to individuals or groups for whom service is wholly supported by funds from sources other than LSC.

Eligibility under these policies does not create an entitlement to legal assistance. LSNC shall determine whether or not to provide service to an eligible individual or group based on the merits of the particular case and the application of LSNC's priorities and case acceptance criteria.

Financial eligibility for legal assistance shall be determined in a manner conducive to the development of an effective attorney-client relationship, and information from applicants and groups shall be obtained in a manner that promotes the development of trust between attorney and client. These policies shall be reviewed at least once every three years and revised as necessary.

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B. Definitions

Applicant: Applicant is an individual who is seeking legal assistance supported with LSC funds. The terms does not include a group, corporation or association.

Assets: Assets are cash or other resources of the applicant or members of the applicant's household that are readily convertible to cash and currently and actually available to the applicant. Examples of assets are cash, stocks, bonds, monies in bank accounts, cash surrender value of life insurance policies, money market certificates, annuities, treasury bills, and other commercial paper, equity value of real property, vehicles, promissory notes, deeds of trust, livestock, art, and restricted retirement accounts. See Section (c)(2)(a) for asset exclusions.

Governmental program for low income individuals or families: Governmental program for low income individuals or families is any local, State, or Federal program that provides benefits of any kind to persons whose eligibility is determined on the basis of financial need. Such benefits include but are not limited to subsidized housing benefits (e.g., Section 8, other HUD or Rural Housing Development rental or ownership housing, Low Income Tax Credits rental housing etc.), health care benefits (e.g., MediCal, County indigent care, IHSS etc.), and cash aid benefits for low income persons.

Governmental program for persons with disabilities: Governmental program for persons with disabilities is any local, State, or federal program that provides benefits of any kind to persons whose eligibility is determined on the basis of mental and/or physical disability.

Household: Household is all persons in the applicant's residence upon whom the applicant substantially relies upon for financial support and/or who substantially rely on the applicant for financial support.

Income: Income is the actual current annual "total cash receipts" of all persons who are members of the applicant's "household."

Maximum annual income level: The maximum annual income level of an applicant is one hundred and twenty-five percent (125%) of the current federal poverty guidelines.

Total cash receipts: Total cash receipts include, but are not limited to: wages and salary before any deductions; income from self-employment after deductions for business or farm expenses; regular payments from governmental programs for low income persons or persons with disabilities; social security payments; unemployment and worker's compensation payments, strike benefits from union funds; veterans benefits; training stipends; alimony; child support payments; military family allotments; public or private employee pension benefits; regular insurance or annuity payments; income from dividends, interest, rent, royalties or from estates and trusts; and other regular or recurring sources of financial cash support that are currently and actually available to the applicant.

Total cash receipts do not include the value of food or rent received by the applicant in lieu of wages; money withdrawn from a bank; tax refunds; gifts; compensation and/or one time insurance payment for injuries sustained; noncash benefits, including Food Stamps or Medicaid; student loans and grants, and up to $2,000 per year of funds received by individual Native Americans that is derived from Indian trust income; or other distributions exempt by statute.

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C. Financial Eligibility

1. Maximum Annual Income Level

(a) To be eligible to receive legal assistance from LSNC with LSC funds, an applicant's income may not exceed the maximum annual income level (i.e., 125% of the current federal poverty guidelines). Attachment A is the current federal poverty guidelines and LSNC financial eligibility chart which shall be promptly revised annually by the Board after the federal poverty guidelines are published by the U.S. Department of Health and Human Services.
(b) The Board, in establishing this maximum annual income level, took into consideration the cost-of-living in the LSNC service area, the number of persons who can be served by available program resources, the population that would be eligible for legal assistance at alternative income levels, and the availability and cost of legal services provided by the private bar.
(c) Unless authorized by sections 1161 C.3. and C.4. of this Policy, no applicant whose income exceeds the maximum annual income level shall be eligible for any LSC-funded assistance.

2. Asset Ceilings

(a) The following shall be excluded from calculation of an applicant's assets:
  • The value of the household's principal residence;
  • Any asset used in producing income for the household;
  • Any vehicle used for transportation by the household;
  • Any assets which are exempt from attachment under State or Federal law.
(b) To be eligible to receive legal assistance from LSNC with LSC funds, the aggregate value of an applicant's non-excludable assets shall not exceed $5,000 for a single person household, $8,000 for a household of two or more, unless waived pursuant to section 1161(d) of this Policy.
(c) The Board, in establishing the asset ceiling, took into consideration the cost-of-living in the LSNC service area, the number of persons who can be served by available program resources, the population that would be eligible for legal assistance at alternative income levels, and the availability and cost of legal services provided by the private bar.
(d) The Executive Director shall have the authority to waive the asset ceilings in section 1161 C.2(b) in unusual or extremely meritorious situations. The Executive Director may designate the Managing Attorneys the authority to waive assets ceilings pursuant to this section. If a waiver is granted, that decision shall be documented and included in the client's file. LSNC shall keep such records as are necessary to inform LSC of reasons for such waiver.

3. Authorized Exceptions to the Annual Income Ceiling

(a) If the applicant meets the asset ceiling for the household size (or the asset ceiling is waived) pursuant to section 1161 C.2. and the applicant's income exceeds the maximum annual income level (i.e., 125% of the current federal poverty guidelines), the applicant shall still be financially eligible for LSC-funded legal assistance without regard to any income limit if:
(i) The applicant is seeking legal assistance to maintain benefits provided by a governmental program for low income individuals or families;
OR
(ii) The Executive Director has determined that the applicant's income is primarily committed to medical or nursing home expenses and that, excluding such expenses, the applicant would be otherwise financially eligible for legal assistance (i.e., the applicant's remaining amount of income would not exceed the maximum annual income level). The Executive Director may designate the Managing Attorneys to have the authority to make determinations pursuant to this section.
(b) If the applicant meets the asset ceiling for the household size (or the asset ceiling is waived) pursuant to section 1161 C.2. and the applicant's income exceeds the maximum annual income level (i.e., 125% of the current federal poverty guidelines) but does not exceed 200% of the current federal poverty guideline, the applicant shall still be financially eligible for LSC-funded legal assistance if:
(i) The applicant is seeking legal assistance to obtain governmental benefits for low income individuals and families; or
(ii) The applicant is seeking legal assistance to obtain or maintain governmental benefits for persons with disabilities; or
(iii) One or more of the following factors is considered:
  • The applicant's income prospects are limited or the applicant experiences seasonal variations in income.
  • The applicant has unreimbursed medical expenses, including medical insurance premiums and copays.
  • The applicant has fixed debts or obligations, including but not limited to unpaid taxes, mortgage payments, rent, child and spousal support, and business equipment loan payments. It does not include expenses for food or utilities, or credit card debt.
  • The applicant has expenses such as for dependent care; transportation or equipment necessary for employment, job training, or educational activities in preparation for employment.
  • The applicant has non-medical expenses associated with age or disability.
  • The applicant is responsible for paying current taxes. Such taxes include all Federal, State, and local taxes on income and employment, and property taxes. Current taxes do not include sales taxes.
  • Other significant factors that affect the applicant's ability to afford legal assistance.
(c) The specific facts and factors for providing an exception to an applicant under this section shall be recorded in the client's file, including the source and amount of expenses, if applicable. LSNC shall keep such records as are necessary to inform LSC of the specific facts and factors of such determinations.

4. Applicants Whose Income Is Solely Derived from Governmental Programs for Low-Income Individuals and Families

Notwithstanding the above, if an applicant's household income is derived solely from governmental programs for low income individuals or families that have an assets test and have income standards that are at or below 125% of the current federal poverty guidelines, the applicant is eligible for LSC-funded legal assistance without an independent determination of the applicant's income and assets. These programs include cash aid assistance such as Supplemental Security Income (SSI), CalWORKs, and county General Assistance/Relief. Legal assistance in such cases may be provided on any matter within LSNC's stated priorities.

5. Victims of Domestic Violence

If an applicant has identified herself/himself as a victim of domestic violence, in determining financial eligibility for LSC-funded services, LSNC shall consider only the assets and income of the applicant and those members of the applicant's household other than the alleged perpetrator of domestic violence, and shall not include any assets held by the alleged perpetrator of domestic violence, jointly held by the applicant with the alleged perpetrator, or jointly held by any member of the applicant's household with the alleged perpetrator.

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D. Group Eligibility for Representation

1. These group eligibility policies apply only to LSC-funded legal assistance. LSNC may use non-LSC funds to support representation of groups that do not meet these group eligibility standards. In order for a group, corporation, association or other entity to be eligible for LSC-funded legal assistance, it must provide LSNC with information regarding the resources available to the group, showing that it lacks, and has no practical means of obtaining, funds to retain private legal counsel. Such information should include the group's income and income prospects, assets and obligations. A group that provides information showing that it lacks the resources to hire private counsel is eligible for LSC-funded legal assistance:

(a) If the group, or for a non-membership group the organizing or operating body of the group, is primarily composed of individuals who would be financially eligible for LSC-funded legal assistance, as determined by the financial or other socioeconomic characteristics of the persons comprising the group or its operating body; or
(b) If one of the group's principal activities is the delivery of services to those persons in the community who would be financially eligible for LSC-funded legal assistance, as determined by the financial or socioeconomic characteristics of the persons served by the group, and the legal assistance sought by the group is related to such activity. LSNC shall collect information that reasonably demonstrates that the group meets the eligibility criteria set forth in these policies.
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E. Financial Eligibility Information and Status

LSNC shall make reasonable inquiry regarding the sources of an applicant's income, the applicant's income prospects and the applicant's assets, and shall record information to document the applicant's income and assets. If there is substantial reason to doubt the accuracy of financial eligibility information provided to LSNC by an applicant or group, LSNC staff shall make reasonable inquiry to verify the information in a manner consistent with the attorney-client relationship. If, after making a determination of financial eligibility and accepting a client for LSC-funded service, LSNC staff become aware that the client has become financially ineligible for LSC-funded services through a change in circumstances, LSNC shall discontinue representation supported with LSC funds if the change in circumstances is sufficient, and is likely to continue, to enable the client to afford private legal assistance and discontinuation is not inconsistent with the rules of professional responsibility. If, after making a determination of financial eligibility and accepting a client for LSC-funded services, LSNC later determines that the client is financially ineligible for LSC-funded services on the basis of later discovered or disclosed information, LSNC shall discontinue LSC-supported representation if discontinuation is not inconsistent with the rules of professional responsibility.

Related Resources:

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

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