Legal Aid NSW Policy Online
Document Type: Guideline
Chapter:5. Contributions


5.1. Paying Initial Contributions

5.1.1 Why do clients have to pay an initial contribution?

Legal Aid NSW operates with limited funds, and the collection of contributions from our clients is an important source of funding which allows us to maintain the legal services we provide. The provision of legal services by Legal Aid NSW involves significant costs and expenses.

Imposing a contribution communicates to our clients and the community generally, that legal aid is not free and legally aided persons should contribute to the costs of providing the legal service.

5.1.2 When does an initial contribution need to be paid?

When a grant of aid is made, the grant letter informs the legally aided person of the amount of the initial contribution and the due date for payment.

If the grant letter has not been sent directly to the client, their lawyer must provide this information to the client as soon as possible.

There is a client information sheet which sets out the details for paying contributions (staff internal link only) which is attached to the grant letter.

5.1.3 What is the due date?

The due date is 30 days from the date of the grant letter.

By the due date, either:

5.1.4 What happens if the initial contribution is not paid by the due date?

5.1.5 My client can't pay the initial contribution

Contributions can be paid by instalments. If you arrange for your client to pay by instalments, you must inform the Accounts Receivable Unit (ARU) on accounts.rcble@legalaid.nsw.gov.au so that automated reminder letters are not sent to your client.

Interest is charged on debts being paid by instalments once the thirty days has passed.

If your client owns real property, the initial contribution can be secured by a Charge – please see charge procedures for more information.

The initial contribution may be reduced in exceptional circumstances.

See Guideline 5.2 for exceptional circumstances test.

Note: Once the matter is concluded, the initial contribution can only be changed to a lower amount by a write-off. Only officers with a delegation can authorise a write-off.

Clients who do not pay their contribution will not be eligible for future grants of legal aid unless the debt is paid or Legal Aid NSW is satisfied there are exceptional circumstances.

5.1.6 What payment methods are available?

For inhouse clients the following payment options are available:

Date Last Published: 01/07/2019

5.2. Reducing or waiving an initial contribution - the exceptional circumstances test

Initial contributions may be waived or reduced where Legal Aid NSW is satisfied that there are exceptional circumstances.

5.2.1 (a) Where the applicant has requested a reduction of the minimum ($75) contribution

Legal Aid NSW may be satisfied that there are exceptional circumstances where the applicant:

See Contributions Guideline 5.1.5 for information on clients paying by instalments.

Note: There is further discretion to reduce the initial contribution where Legal Aid NSW is satisfied there are exceptional circumstances. Only Directors have the delegation to reduce the contribution.

5.2.1 (b) Where an applicant in custody requests a waiver of the minimum ($75) contribution

Legal Aid NSW will be satisfied there are exceptional circumstances where:

See Contributions Guideline 5.1.5 for information on clients paying by instalments.

5.2.2 Where the contribution amount calculated is based on savings or assets the applicant has at the time of applying for legal aid

Legal Aid NSW will consider that savings, shares or any asset that can be converted into cash is available to contribute towards the costs of providing the legal service (ie the calculated contribution amount) unless Legal Aid NSW is satisfied that: either the savings, shares or assets:

See Contributions Guideline 5.1.5 for information on clients paying by instalments.

Note: An asset based contribution may be reduced by the amount paid for a committal grant in the same criminal proceedings.

Note: There is discretion to reduce the initial contribution where Legal Aid NSW is satisfied there are exceptional circumstances. Only Directors have the delegation to reduce the contribution.

5.2.3 Where the contribution amount calculated is based on the applicant's income

Where the contribution amount calculated is based on the applicant’s income, Legal Aid NSW will consider that an applicant's income is available to contribute towards the costs of providing the legal service (ie. the calculated contribution amount).

Where an applicant is unable to pay the calculated contribution amount upfront, Legal Aid NSW will ask the applicant to enter into a payment arrangement so the contribution amount can be paid in instalments.

See Contributions Guideline 5.1.5 for information on clients paying by instalments.

Note: There is discretion to reduce the initial contribution where Legal Aid NSW is satisfied there are exceptional circumstances. Only Directors have the delegation to reduce the contribution.


Date Last Published: 01/07/2019

5.3. Refunding an initial contribution

5.3. Refunding an initial contribution

Initial contributions will only be refunded if the calculated initial contribution amount is more than the total costs and expense of providing the legal service.

Case sample

Robert had an initial contribution of $1900 imposed for his District Court matter. He paid the initial contribution amount. When the matter was finalised the total costs and expense of providing the legal service in the matter was $1750. Robert will be refunded $150.


Note: Costs include professional fees (including those of an inhouse lawyer)  and disbursements

Note: the minimum contribution amount will never be reimbursed to a client.

Date Last Published: 01/07/2019
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5.4. Securing contributions with a charge over real property

5.4.1 Taking a charge where the applicant has real property

Note: If the property is the subject of a terms purchase agreement with the Department of Housing, the Department of Housing’s consent must be obtained.

Note: The requirement for the legally aided person to give a charge over real property also applies to any financially associated person. See the Means Test 7.3: Whose means are considered when applying the Means Test?. See also Policy 7.6.2 for Asset test in all other matters.

Note: There is discretion not to take a charge where Legal Aid NSW is satisfied there are exceptional circumstances. Only Directors have the delegation not to take a charge

5.4.2 Important points when preparing a Charge

Note: All charges are managed by the Accounts Receivable Unit. Once a charge is executed it must be sent to the ARU.

5.4.3 After the Charge is signed

Once a Charge has been signed by the client, the file manager must forward the original Charge to ARU to arrange for lodgment of the caveat.

The file manager must forward to the ARU:

A caveat must be lodged at NSW Land & Property Information as soon as possible after the charge has been executed:

Note: The Charge must be forwarded to the ARU to lodge a caveat two (2) weeks after the Charge has been signed.  If the charge is forwarded more than two months have lapsed, the memorandum must indicate the reasons for the delay.


5.4.6 Guidance on exercising the discretion not to take a charge

This is not intended to be exhaustive but the following circumstances could be taken into account when exercising this discretion:

Capacity

Capacity will generally only be a concern in criminal law matters because clients in civil and family will have tutor/case guardians. There will be obvious cases in crime where capacity is an issue (not fit to plead) but there will also be other cases where the client may have significant cognitive impairment which can mean they become fixated etc and refuse to sign the charge: where the continued refusal to sign the charge could impact on a person’s right to a fair trial and/or the administration of justice.

When it would not be appropriate in the circumstances to take a charge

This could arise in a variety of circumstances. For example, it could be where the real property has been purchased using money received in reparation for being part of the stolen generation.

What is in the public interest?

The following are guiding principles for determining whether the "public interest" requirement is satisfied:

There may be competing public interests in any one case that have to be weighed against each other.

5.4.7 Calculating whether a charge must be given

Where it is determined that a legally aided applicant will be required to give a Charge over the real property to secure the costs and expense of providing the legal service, Legal Aid NSW will estimate the costs of proceedings by calculating the average costs paid to private lawyers for a particular type of matter.

The charge will initially protect costs of $16,000 as the stamp duty is a flat rate up to this amount.

Last published on 01/07/2019

5.5. Calculating the contribution to legal costs

A section 46 determination must be made in every matter. The contribution to legal costs imposed will be nil unless the legally aided person falls into any of the categories below.

5.5.1 Where a legally aided person owns real property

Legal Aid NSW will determine that the contribution to legal costs will be equal to the total costs and expense of providing the legal service:

Note: The total costs and expenses will include costs incurred under s.33 of the Act. Any initial contribution paid will be subtracted from the total amount.

Note: This guideline does not apply to grants of aid made prior to 1 June 2015.

Note: There is discretion to reduce the contribution to legal cost where Legal Aid NSW is satisfied there are exceptional circumstances. Only Directors have the delegation to reduce the contribution.


5.5.2 Where a legally aided person’s financial circumstances have changed

Where Legal Aid NSW is aware the legally aided person’s financial circumstances have changed at the time of making the s.46 determination, the officer making the determination must request an updated financial statement from the legally aided person.

This might happen where a legally aided person, for example:

Once an updated financial statement is received, the final contribution must be calculated using the final contribution scale.

Note: this guideline does not apply to veteran matters under Part II of the Veterans' Entitlements Act 1988 (Cth) or under the Military Rehabilitation and Compensation Act 2004 (Cth) where the means test is not applied.

5.5.3 When the legally aided person recovers money

Where a legally aided person recovers money, the contribution to legal costs payable will be equal to total costs and expense of providing the legal service

Calculating the contribution to legal costs where the legally aided person recovers money

Centrelink and Child Support back payments

Legal Aid NSW will not take into account any money received by way of back payment in social security matters or lump sum amounts received in child support matters when calculating the contribution to legal costs.

Where a legally aided person recovers $5,000 or less

Legal Aid NSW will not take into account any money recovered up to $5,000 when calculating the contribution to legal costs.

How will Legal Aid NSW calculate the contribution to legal costs where a person recovers more than $5,000?

The total costs of providing the legal service will be imposed on any amount recovered over $5,000.

Note: There is discretion to reduce the contribution to legal cost where Legal Aid NSW is satisfied there are exceptional circumstances. Only Directors have the delegation to reduce the contribution.

Note: Where legal aid is granted under Family Law Policy 5.6: property settlement after separation the determining officer must consider Family Law Guideline 2.19 Significant Financial Benefit Test before calculating the client’s contribution to legal costs.


5.5.4 When a legally aided person recovers or retains an interest in real property

Where a legally aided person recovers or retains an interest in real property, the contribution to legal costs payable will be equal to total costs and expense of providing the legal service.

Note: Where a legally aided person owns real property they must give a charge to secure the total costs of providing the legal service as a condition of the grant of legal aid.

Note: Where a charge is not taken as a condition of the grant, and the legally aided person is unable to pay the total costs of providing the legal services, a charge must be taken over the property to secure the contribution amount.

Note: There is discretion to reduce the contribution to legal costs where Legal Aid NSW is satisfied there are exceptional circumstances. Only Directors have the delegation to reduce the contribution.

5.5.5 When costs are awarded to the legally aided person

Where costs are awarded in favour of the legally aided person, those costs will be paid to Legal Aid NSW.

The contribution amount must be calculated and the legally aided person advised of the final contribution amount.

In calculating the final contribution amount Legal Aid NSW will also take into account whether:

If there is a shortfall between the amount of costs awarded and the contribution amount, the legally aided person will be required to pay the difference in accordance with either  Contributions Guideline 5.5.1, 5.5.2, 5.5.3 or 5.5.4.

Note: There is discretion to reduce the initial contribution to legal costs where Legal Aid NSW is satisfied there are exceptional circumstances. Only Directors have the delegation to reduce the contribution.

5.5.6 When legal aid is terminated

Where legal aid is terminated, in calculating the contribution amount Legal Aid NSW will take into account whether:


Inhouse matters

Where legal aid is terminated because the legally aided person has decided to be privately represented, the inhouse lawyer must seek an undertaking from the private lawyer before transferring the file, to protect the final contribution amount where it is likely the person will recover an interest in property or money and the contribution is not secured by way of charge.

Assigned matters

Where legal aid is terminated because the legally aided person has decided to be privately represented, the Grants Division must seek an undertaking from the private lawyer to protect the final contribution amount where it is likely the person will recover an interest in property or money and the contribution is not secured by way of charge.

Date Last Published: 01/07/2019

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5.6. Notifying the legally aided person of the contribution to legal costs

Where Legal Aid NSW determines that a final contribution amount will be imposed:

• the legally aided person must be informed in writing of the contribution amount, and
• provided with forty-two (42) days in which to pay the total amount.


5.6.1 Where a client seeks a reduction in the final contribution amount

Where the legally aided person seeks a reduction in the contribution amount within the forty-two (42) days, they must be informed that a reduction in the final contribution will only be made in exceptional circumstances.

See Contributions Guideline 5.8 to determine whether there are exceptional circumstances.


5.6.2 Where a legally aided person disputes the contribution amount

Where a legally aided person disputes the contribution amount, the calculated amount must be reviewed for any error in calculation. 

If an error is detected the final contribution amount must be recalculated and the legally aided person informed of the new amount. The legally aided person will be given thirty (30) days to pay the recalculated contribution.

Where the legally aided person disputes the contribution amount in an assigned matter, they are entitled to have the private lawyer’s bill of costs assessed.

See Contributions Guideline 5.7 for guidance on the costs assessment of a private lawyer’s bill.


5.6.3 Where the contribution amount is not paid within forty-two (42) days

Where a legally aided person:

and the contribution is not paid within the forty-two (42) days, it must be recorded as a debt and referred to Accounts Receivable Unit for recovery.

Last published on 01/06/2015

5.7. Costs assessment of private lawyers' costs

A legally aided person is entitled to have the costs paid to a private lawyer assessed (see s.40 of the Legal Aid Commission Act 1979).

A legally aided person may dispute the final contribution to be paid because of the costs paid to the private lawyer.

5.7.1 Procedure if legally aided person disputes the contribution to legal costs because of costs paid to the private lawyer

Consider whether there are any circumstances which would lead to a reduction in the contribution to legal costs. Refer to Contributions Guideline 5.8 for guidance on what can be taken into consideration when reducing contribution to legal costs.

If the calculated contribution amount is not changed Legal Aid NSW will:

5.7.2 Where the legally aided person is referred to costs assessment

In referring the legally aided person to costs assessment, Legal Aid NSW should:

A person has 12 months to apply for assessment of a bill, even if the contribution (or bill) has already been paid.

5.7.3 Responsibility for following up the debt

The Accounts Receivable Unit will be responsible for following up the debt.

5.7.4 Where costs assessment reduces the private lawyer’s bill of costs

In the event the client has paid the contribution amount and the costs assessment certificate reduces the original amount paid to the lawyer, the difference may be repaid to the client.

Legal Aid NSW may recoup the difference paid to the legally aided person from the private lawyer.



Date Last Published: 01/07/2019
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5.8. Reducing a contribution to legal costs

There is discretion to reduce the contribution to legal cost where Legal Aid NSW is satisfied there are exceptional circumstances. Only Directors have the delegation to reduce the contribution.



Date Last Published: 01/07/2019

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5.9. Assigning the right to recover costs

Where costs are ordered in favour of the legally aided person, the lawyer representing that client is responsible for recovering those costs.

In the event, the client fails to provide instructions to the lawyer in relation to recovery of those costs, Legal Aid NSW will direct the client to assign the right to recover those costs as provided for under s.45 of the Legal Aid Commission Act 1979 (NSW) (the Act).

If you are representing a client who fails to provide you with instructions to recover costs, you must refer the matter to the Costs Recovery Officer, Grants Division.

Date Last Published: 29/05/2015

5.10. Refunding a contribution to legal costs

The only time a contribution to legal costs can be refunded is where the original amount was incorrect.

If, for example, a legally assisted person has paid a contribution to legal costs and the amount paid is greater than the total costs and expenses of providing the legal service, the legally assisted person will be reimbursed the difference.


Date Last Published: 01/07/2019