The Legal Services Amendment Bill, which will see the removal of interest on unpaid legal aid debt, has been passed in Parliament today.
The Bill also removes the one-off $50 user charge paid by most people who receive civil and family legal aid, when their application is successful.
“It’s extremely important that we have a legal aid scheme that is accessible for people who need it. These changes will give certainty to those using legal aid that they will not be subject to additional financial penalties when accessing justice,” said Justice Minister, Ginny Andersen.
The changes are in response to a 2018 review of legal aid carried out by the Ministry of Justice and are part of the Budget 2022 package of $148.7 million to strengthen the legal aid system. The 2018 review found that the $50 user charge fee disincentivised some applicants from applying for legal aid.
Alongside the removal of the user charge fee and the payment of interest, eligibility thresholds have increased by 15%, making 93,000 more people eligible for civil and family legal aid in the first year, with additional increases by 1.9% each year until 2025.
Repayment thresholds have also increased by 16.5%, relieving financial pressures for around 16,000 low-income New Zealanders.
Lastly, the hourly rates for legal aid providers have increased by 12%.
“Many people who couldn’t afford a lawyer will now be able to access proper legal representation and this will go a long way to ensuring our justice system is fit for purpose,” Minister Andersen said.