If an applicant receives a grant of legal assistance (a grant), they may need to pay for some or all of the costs we paid for their legal matter. This is known as a contribution. A contribution is normally paid in instalments.
We can also request a contribution from an applicant’s partner (if no exemption applies).
We make decisions about contributions:
- when we first approve a grant of legal assistance (initial contribution), and
- if an applicant received a grant of legal assistance, at the end of their legal matter (final contribution), and
- if an applicant’s financial circumstances change while the grant is still ongoing.
This section talks about how we decide if an applicant who has been granted legal assistance needs to pay a contribution, how we calculate a contribution, how payments are made and how we follow up overdue contributions.
How do we decide if an assisted person needs to pay a contribution?
An applicant who has been granted legal assistance is known as an assisted person. We use two principles to guide how we decide if an assisted person needs to pay a contribution:
- an assisted person should be treated fairly and equitably, and
- an assisted person should contribute to their legal costs where possible.
We have set thresholds for an assisted person’s (and if relevant, combined with their partner’s) income and assets as well as the expenses and legal costs to determine whether an assisted person will need to pay a contribution.
What are our thresholds?
Table 1 – income contribution calculations
| Category of matter | Estimated legal costs | Will a contribution need to be paid? |
|---|---|---|
|
Category 1 – low cost matters Includes summary crime, family violence intervention orders and infingements |
Less than $1555 | If an assisted person’s (and if relevant, combined with their partner's) assessable income is between $361 and $469 a week, they will need to pay a contribution. |
|
Category 2 – medium cost matters Includes child protection, County Court criminal appeals and initial stages of family law |
Between $1555 and $6559 |
If an assisted person’s (and if relevant, combined with their partner’s) assessable income is between $361 and $539 a week, they will need to pay a contribution. |
|
Category 3 – high cost matters Includes family law trials, criminal indictable trials and criminal appeals to the Court of Appeal |
More than $6559 | If an assisted person’s (and if relevant, combined with their partner’s) assessable income is more than $360 a week and less than the estimated legal costs, they will need to make a contribution. |
If an assisted person’s (and if relevant, their partner’s combined) assessable income is $360 or less per week, we won’t require them to pay a contribution on their income no matter which category the grant falls into.
How much is an assisted person’s contribution likely to be?
The amount of an assisted person’s contribution depends on their (and if relevant, their partner’s) income and assets as well as the likely cost of their legal matter. The contribution may be made up of two components – one component based on their net income and another component based on their net assets:
- Table 2 sets out how we calculate the component of the contribution that is based on their assessable income, and
- Table 3 sets out how we calculate the component of the contribution that is based on their assessable assets.
Table 2 – income contribution
|
Assessable disposable weekly income (rounded) |
Low cost – less than $1555 |
Medium cost – between $1555 and $6559 |
High cost – more than $6559 |
|---|---|---|---|
| $361–369 ($365) | $280 | $580 | $1175 |
| $370–379 ($375) | $340 | $800 | $1605 |
| $380–389 ($385) | $430 | $1005 | $1995 |
| $390–399 ($395) | $530 | $1230 | $2455 |
| $400–409 ($405) | $605 | $1500 | $3030 |
| $410–419 ($415) | $740 | $1765 | $3545 |
| $420–429 ($425) | $870 | $2060 | $4180 |
| $430–439 ($435) | $1070 | $2395 | $4855 |
| $440–449 ($445) | $1219 | $2840 | $5670 |
| $450–459 ($455) | $1418 | $3240 | $6485 |
| $460–469 ($465) | $1617 | $3640 | $7305 |
| $470–479 ($475) | * | $3830 | $7720 |
| $480–489 ($485) | * | $4360 | $8770 |
| $490–499 ($495) | * | $4890 | $9735 |
| $500–509 ($505) | * | $5375 | $10,900 |
| $510–519 ($515) | * | $5885 | $11,780 |
| $520–529 ($525) | * | $6435 | $12,835 |
| $530–539 ($535) | * | $6980 | $13,900 |
| $540 and over | * | * | $13,900 plus $1065 for every $10 of net disposable weekly income more than $540 |
* not eligible for a grant of legal assistance
Table 3 – asset contribution
| Net value of assets (rounded to nearest $100) |
Contribution | Net value of assets (rounded to nearest $100) |
Contribution |
|---|---|---|---|
| $100 | $20 | $1600 | $500 |
| $200 | $40 | $1700 | $550 |
| $300 | $60 | $1800 | $600 |
| $400 | $80 | $1900 | $650 |
| $500 | $100 | $2000 | $700 |
| $600 | $130 | $2100 | $760 |
| $700 | $160 | $2200 | $820 |
| $800 | $190 | $2300 | $880 |
| $900 | $220 | $2400 | $940 |
| $1000 | $250 | $2500 | $1000 |
| $1100 | $290 | $2600 | $1060 |
| $1200 | $330 | $2700 | $1120 |
| $1300 | $370 | $2800 | $1180 |
| $1400 | $410 | $2900 | $1240 |
| $1500 | $450 | $3000 | $1300 |
| - | - | more than $3000 | $1300 plus the full value of assets above $3000 |
What will we tell the assisted person about their contribution?
When an assisted person receives a grant, we will send them a letter telling them if they need to pay a contribution, and, if so:
- how much we estimate that contribution will be, and
- when they need to make payments.
This contribution amount is indicative only and can change. This is because we can only estimate how much a legal matter is likely to cost before it happens.
How are contributions paid?
The assisted person can make their contribution in monthly instalments spread across 12 months.
These payments can be made:
- through Internet and telephone banking (BPAY and bank transfer)
- by cheque, or
- by postal order.
When an assisted person is approved for a grant, we will send them a letter that will tell them how to make these payments.
If an assisted person has real estate, we will generally require that they agree to us placing a caveat over that property which will secures the contribution owing to us.
If an assisted person would like to make payments less frequently, or pay in smaller instalments, they can contact Grants and Quality Assurance directly on (03) 9269 0600 to discuss their options.
If an assisted person feels they will struggle to make these payments, or think the contribution was calculated unfairly, they can request that we reduce the amount of the contribution or decide that they are not required to pay a contribution. We can exercise discretion to do this. The assisted person should provide any information that may support their request.
Final contributions
When an assisted person’s grant has ended, we will recalculate their contribution based on how much their grant actually cost us. The contribution may increase or decrease as a result. This is known as a final contribution.
We may also increase a contribution if:
- an assisted person receives money from their legal proceedings, or
- an assisted person gets real property from their legal proceedings, or
- an assisted person’s financial circumstances have changed.
Exemptions
An assisted person who is Aboriginal or Torres Strait Islander is exempt from having to pay a contribution towards the cost of their legal services if they receive a financial settlement in a discrimination matter.
How is the final contribution calculated?
We work out the final contribution by:
- checking what the actual legal costs were
- asking the assisted person to complete a financial statement form and send it back to us
- recalculating the means test based on the updated information
- calculating the revised contribution amount, and
- subtracting any payments the assisted person, or any other party, have already made.
How is the final contribution paid?
We will generally require an assisted person to pay their final contribution by regular instalments in the same way that an initial contribution is paid.
Is there any interest or indexation?
We impose indexation on grants that are approved on or after 1 October 2018. Contributions secured prior to this date will not be indexed. Applying indexation means that the value of what we spent on a grant remains the same, even if we don’t receive the money for many years.
Indexation only applies for contributions secured over real property.
Indexation is set at the consumer price index (CPI) rate and is applied yearly on the date when we have set the final contribution. For example, if a final contribution was set on 14 October 2018, then indexation will be applied to the total amount owing on 14 October 2019 and on this date each year.
Interest is not imposed on contributions.
Charge or other security over real property
If an assisted person (or, if relevant, their partner) have real property, we will generally secure the payment of a contribution by:
- putting a legal charge or other security over that property, or
- indicating the existence of the charge by placing a caveat on the title documents at Land Use Victoria.
This will let us recoup the money we spend on the legal matter.
What is an equitable charge?
An equitable charge on a house or other property gives us security over the amount we spend on a legal matter.
What is a caveat?
We register a legal notice on a property that is known as a caveat. It alerts people that we have an interest in this property.
An assisted person will be restricted in what they can do with the property as long as the caveat remains on it.
When will we ask an assisted person to sign an equitable charge?
We may ask an assisted person to sign an equitable charge as a condition of a grant in one or more of the following situations:
- before we grant assistance, or
- when we grant further assistance, or
- at the end of a grant.
We will generally only ask an assisted person to sign an equitable charge if the total cost of what will be owed is more than a low-cost matter.
We may also ask for the equitable charge instead of, or as well as, requiring an assisted person to pay an initial contribution or a final contribution.
What if an applicant does not sign an equitable charge?
If we ask an applicant to sign an equitable charge as a condition of receiving a grant, we will ask them to sign the charge and return it to us in a form which enables us to register it.
If an applicant refuses to sign the charge, we will tell their lawyer that any cost of acting for them will not be paid by us. We will also suspend the grant. We will notify the applicant and their lawyer of this.
The grant will only commence if the applicant:
- signs the equitable charge, or
- give us a satisfactory explanation for not signing the charge, or
- asks us to reconsider our decision to impose an equitable charge and the decision is varied.
What if an assisted person continues to refuse to sign an equitable charge?
If an assisted person continues to refuse to sign an equitable charge to secure the payment of money already owed to us, we can put a statutory charge on the property (or, if relevant, their partner’s property) under sections 27 and 47A of the Legal Aid Act 1978 (Vic). We can do this if:
- we have written to tell the assisted person that they are eligible for a grant of legal assistance on condition of costs being secured by an equitable charge, and
- the assisted person has not paid the amount, and
- the assisted person refuses to give an equitable charge to VLA to secure the payment of money already owed to us.
What is an irrevocable authority?
This is a deed which allows us to secure costs against an assisted person’s interest in property (including money) which is not held by the assisted person when they are receiving a grant.
This includes, for example:
- where an assisted person may be expecting to receive proceeds of sale of a property
- where an assisted person cannot access funds held in an account which is part of a dispute, and
- where an assisted person expects to receive money as a lump sum in the future, such as from a payment for damages or as a beneficiary of a will.
We will generally require an assisted person and their lawyer to sign the deed assigning such interest to us as security for our costs in providing an assisted person with legal assistance.
How much of a contribution is secured over real property?
An assisted person’s final contribution minus any payments an assisted person or another party makes to us on behalf of the assisted person, will be secured by any equitable charge or statutory charge.
When will payment be required?
We may require an assisted person to repay the amount we spent on their legal matter when they:
- sell the property
- sell the property and buy other property
- obtain a new loan, using their property as security
- transfer the property – for example, as part of a family law property settlement or, in the event of the assisted person’s death, from their deceased estate.
What needs to be done if an assisted person wants to sell, transfer or borrow against their property?
Before signing a contract to sell, transfer, mortgage or refinance their property, the assisted person should call our Grants and Quality Assurance team on (03) 9269 0600 to find out how much they will need to pay us at the time of settlement.
At least 21 days before the agreed settlement date for a sale, transfer or loan, the assisted person or their lawyer should call or write to us to confirm requirements for removal of the caveat on the property.
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