New figures obtained by the Herald reveal there has been a 41 per cent rise in the number of people refused help from Legal Aid NSW because they earn more than the income test threshold of $318 a week.
Most people who apply for legal help - 85 per cent - are on Centrelink benefits.
An internal report by Legal Aid prepared for the Attorney-General, Greg Smith, says legal aid has become ''welfarised''.
The report says a high level of unmet demand for legal aid has led to a big ''justice gap'' that has left socially and economically disadvantaged people unable to access the courts.
The report says that in 2011-12, 16 per cent, or 1987 applications for legal aid, were refused, a rise of of 41 per cent over the previous year. The briefing note for the Attorney-General, obtained by the Herald, says ''the working poor and low middle-income earners are unable to access legal aid and also not able to afford the cost of litigation themselves''.
''Many people falling into this justice gap have become self-represented litigants.''
The number of people charged who appear in the Local Court without legal representation rose from 37.2 per cent in 2008 to 40.3 per cent in 2010. More than a third of family law matters involve at least one party without any legal representation.
The report says the increasing numbers of self-represented litigants had ''cost implications'' for the justice system.
''Importantly, as access to the legal system decreases, there is also a loss of confidence in the justice system and the rule of law,'' the Legal Aid report says.
Mr Smith said the problem needed government attention. ''This situation is concerning as access to the justice system is vital, yet it is becoming out of reach for an increasing number of people,'' he said. ''I will be investigating ways in which the government may be able to better manage the use of taxpayers' money going to Legal Aid.''
Legal Aid says it has stepped up advice and minor assistance to people to manage increasing demand. Provision of these services is not means-tested unlike the provision of legal aid.
Demand for services for people with credit and debt issues has continued to rise. ''In the last half of 2011, Legal Aid NSW provided an average of 405 services and more than 50 grants of legal aid each month,'' the report says.
The chief executive officer of Legal Aid NSW, Bill Grant, said the means test for aid was set ''extremely low'' to ensure only the most disadvantaged could obtain help. ''Accordingly, there is a high level of unmet demand in the community, which Legal Aid NSW tries to meet through the provision of legal information, advice and minor assistance services to the community,'' he said.
Source Sydney Morning Herald www.smh.com.au
June 23, 2012