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Second Reading Speech by Senior Minister of State for Law, Indranee Rajah, on the Legal Aid and Advice (Amendment) Bill 2013
04 FEB 2013
I beg to move, “That the Bill be now read a Second time”.
Madam Speaker, access to justice is one of the cornerstones of our society. We may have the best laws, the best courts and the best system, but all that would be lost if they cannot be accessed by persons in need.
However, like all things, there is a cost to legal services, and not everyone can afford such services. It was with this in mind that the Legal Aid and Advice Act was originally enacted back in 1956, to ensure access to justice. That objective remains as relevant today as it was then.
The Government is conscious that there are those with meritorious legal claims or defences but who are unable to afford lawyers. The Government has also taken into account the rising costs of living and its impact on a person’s ability to afford legal services. Over the years, the Government has periodically updated the means test to take into account the current costs of living. Past reviews were conducted in 1995, 2001 and 2007. The latest review was completed in 2012.
Following the latest review as well as taking into account feedback from MPs, the Government considers that the proposed amendments are necessary to facilitate greater access to justice by those in need. The proposed amendments take into account the current cost of living, and also expand the coverage of legal aid to include more vulnerable applicants.
The Bill does three things:
It expands the general means test for legal aid under the Act. The effect of this is that it will allow more people to be covered by legal aid.
It expands the discretion of the Director of Legal Aid (Director) to depart from the general means test in exceptional cases. The effect of this is that it will allow another potential group of people to benefit from legal aid who would not fall under the general test.
It improves the general administration of legal aid.
I will now take the House through the main amendments of the Bill.
Widening the general means test to extend greater coverage
The most significant clause in the Bill is Clause 21.
It amends the means test for legal aid prescribed in the Second Schedule of the Act.
Under the Act, a Singapore citizen or Permanent Resident (PR) meets the means test for legal aid if:
His annual disposable income is $10,000 or below; and
His disposable capital is also $10,000 or below.
It is a double-barrelled test, meaning you have to meet both the income test and the capital test.
An applicant’s annual disposable income is calculated by:
Adding his annual income with that of his spouse; and
Deducting the permitted deductibles, for example, his CPF contributions and expenses for daily necessities.
An applicant’s disposable capital is calculated by:
Taking the value of all his assets, for example, property, savings and other assets; and
Deducting therefrom the value of permitted deductibles, e.g. his HDB flat, if that is used as his family home.
The means test is therefore structured to look at the resources which are reasonably available to the applicant to fund his legal needs.
The applicant’s disposable income should therefore not be confused with the applicant’s gross income.
His disposable capital does not include assets which we cannot reasonably expect the applicant to liquidate, for example, the home in which he lives, up to a certain value.
Under the proposed amendments, we will expand coverage of the general means test by expanding the existing deductibles for both income and capital, and by creating new deductibles. This will allow for wider and better coverage.
An applicant can now deduct the following when calculating his disposable income:
$6,000 for his own expenses.
Up from the current $4,500.
$6,000 for his spouse’s expenses.
Up from the current $3,500.
But, this will not apply when the Director has already excluded the income of a separated spouse.
Up to $6,000 for the maintenance of each dependent.
Up from the current $3,500.
Up to $20,000 for rent.
Up from the current $1,000.
This is based on the lower end of the prevailing open-market rental rates for three-room flats in suburban areas.
His spouse’s CPF contributions.
Though again, this will not apply when the Director has already excluded the income of a separated spouse.
That is for income.
As for the disposable capital, an applicant can now disregard the following:
His CPF investments.
These are to be disregarded because he can’t withdraw these to pay for legal services.
The life insurance policies held by him, of up to $46,000 in surrender value.
The annual value of his home, provided that it is $13,000 or less.
This is up from the current annual value of $7,800.
This is equal to the revised maximum annual value of HDB flats.
HDB flats which are used as dwelling homes will remain entirely deductible.
These amendments to the general means test will ensure expanded coverage:
The current coverage of legal aid is about 17 per cent of Singaporeans and PRs. With these amendments, we estimate that the Act will cover about 25 per cent of Singaporeans and PRs.
This would translate to about 300,000 additional persons who can potentially be covered under the Act.
This expanded coverage is separate, and over and above, the Director’s discretion to depart from the general means test in exceptional circumstances, which I shall address later.
So what does this mean in practical terms? Perhaps I can illustrate by this example.
Let’s take a family of four.
Lives in a HDB flat.
One working parent, one homemaker, two children.
Let’s say the gross household income is $3,500 a month, or $42,000 a year.
After deduction of CPF, the gross household income is $2,800 a month or $33,600 a year.
Applying the current test before the amendments, the deduction for each member of the household would add up to $15,000: $4,500 for the applicant, $3,500 x 3 for the spouse and the two children. The annual disposable household income would therefore be $18,600 – and this would be above the $10,000 disposable income limit. So in that example, if you apply the current test, the family would not qualify.
However, if you apply the revised test under the proposed amendments, the deductions can add up to $24,000: $6,000 for the applicant, and up to $6,000 x 3 for his spouse and two children. The annual disposable household income would thus be $9,600, which would bring that family within the $10,000 limit.
If the same family pays rent, the rent would be an additional deductible. As such, their gross household income could potentially go up by another $5,625 and the family would still meet the income limit of the means test.
New discretion for family proceedings
That’s for the means test, but there is also a new discretion that we are introducing for family proceedings.
Clause 21 introduces a special discretion in applying the means test for family proceedings which involve a child or protection orders. The practical effect of this amendment is that it will extend the coverage of legal aid to persons who are the most vulnerable in family disputes.
The Bill introduces a rule-based discretion for the following :
Divorces where a child of age below 21 (i.e. a minor) is involved;
Custody, care and control and access of children, child maintenance, and all cases under the Guardianship of Infants Act, where children below age 21 are involved; as well as
Cases involving the personal protection of a child and/or spouse.
In these types of cases, the Director will have the discretion to relax the deductibles in calculating the applicant’s disposable capital. Under the Bill, in addition to the standard deductibles, he has the discretion to exclude the following from the calculation of disposable capital:
The applicant’s home, provided that its assessed annual value is not more than $20,000.
This is $7,000 more than the ordinary cap of $13,000.
The effect of this amendment is that it will extend coverage to residents of the lower-end of private property.
A new deductible in the form of $5,000 worth of capital.
This in effect raises the disposable capital cap to $15,000.
Expanding discretion for loss of income cases
The proposed amendments also expand the discretion for loss of income cases where the applicant has suffered a sudden loss in income and requires legal aid urgently.
Under the current Act, when an applicant has suffered a sudden loss of income, the Director already has the discretion to assess the applicant’s means by looking at his disposable income for six months instead of the usual 12 months.
Under the proposed amendments, the quantum of the deductibles applicable in such situations will be increased in line with the changes to the general means test for disposable income.
For example, the deductible for dependents in this situation will be increased to $3,000 from $1,750, which is half of the new deductible for dependents under the general means test.
Improvements to the administration of legal aid
The remainder of the Bill makes general improvements to the administration of legal aid.
The salient clauses are as follows.
Clause 3 amends section 4 to empower the Director of Legal Aid to remove a solicitor from the panel of Assigned Solicitors.
The Director of Legal Aid can exercise this power when, for example, a solicitor has ceased practice, or it is shown from his professional conduct that he is not a suitable person to remain on the panel.
However, a solicitor aggrieved by his removal can appeal to the High Court.
Clause 7 amends section 9 to empower the Director to require all applicants for legal aid to make contributions towards the costs incurred for their case.
The approach here is ultimately founded on the principle that the applicant must also exercise responsibility.
An applicant who has a stake in his case has more incentive to be prudent and responsible than one who does not.
The contribution required will depend on the means of the applicant. There will always be cases where the applicant faces great financial hardship. No contribution will be required from those who truly cannot afford to pay any.
Clause 10(d) amends section 12(4)(a) to make clear that the legally aided person is not liable to pay the fees of the bailiffs of the Subordinate Courts in the execution process.
Clause 10(f) inserts a new paragraph (d) in section 12:
To exempt an aided person from having to pay the requisite deposit to the Official Assignee where aid has been granted to commence bankruptcy proceedings against a debtor. This will make it easier for aided persons to recover debts due to them.
Clause 11 amends section 13 to empower the Director to require an applicant for legal aid or a legally aided person to deposit a sum of money to meet out-of-pocket expenses incurred on his behalf.
Clause 20 amends the First Schedule:
To add proceedings before the Syariah Court Appeal Board under the Administration of Muslim Law Act; and
Proceedings before the Commissioner for Labour under the Work Injury Compensation Act;
To the list of proceedings for which legal aid may be granted.
Madam Speaker, in conclusion I would say, the Bill recognises that access to justice is important, and that not all individuals have the ability to get such access without assistance. The Bill reaffirms the Government’s commitment to providing access to justice for the most needy amongst us.
I would also like to acknowledge the officers of the Legal Aid Bureau as well as the important role played by private lawyers who, quietly and without expectation of thanks, give their time and energy to pro bono work, whether as Assigned Solicitors with the Bureau, or under other pro bono initiatives. A debt of gratitude is also owed to the social workers who work alongside the lawyers, dealing with the problems that the law cannot solve.
I would conclude by saying that State legal aid is part of a range of measures to help needy litigants. It is supplemented by the Legal Assistance Scheme for Capital Offences for capital cases, as well as the Criminal Legal Aid Scheme and other pro bono work administered by the Law Society. All of these have a part to play in facilitating the access to justice.