Gergely Fried
Why paper equity can leave separating parents without representation
A parent can be unemployed, receive Universal Credit, have no savings—and still be assessed as too wealthy for legal aid.
Take two separating parents in that position. Their proceedings involve serious allegations and safeguarding concerns. Each may have the evidence needed for a private family matter to fall within the scope of civil legal aid. Neither works or could afford months of private representation.
Yet they remain joint owners of the mortgaged family home.
There may be equity in the property, but neither parent can simply withdraw their share. One parent and the child may still live there. A sale may require both owners’ agreement or further proceedings, while remortgaging may not be realistic when neither is working.
For Universal Credit, they have too little income to meet living costs without state support. For civil legal aid, they may be assessed as owning too much capital.
They are poor enough for Universal Credit, but too wealthy for legal aid.
Universal Credit is only half the assessment
Universal Credit passports an applicant through the income element of the civil legal-aid means test. It does not end the assessment. Capital must still be examined, including savings, investments and property interests. The disposable-capital limit for most civil legal services remains £8,000.
Considering capital is reasonable: public funding should go to people who cannot pay privately. The problem begins when ownership on paper is treated as spending power, even where the asset cannot produce money when help is needed.
Why home equity may not be usable money
A jointly owned home is not a bank account. Before either owner receives anything, it may need to be sold, the mortgage redeemed and the proceeds divided. The other owner may resist a sale, the property may form part of a financial dispute, and a lender may refuse further borrowing where an unemployed applicant cannot show how it would be repaid.
Apparent equity may be small, uncertain or disappear after the mortgage, sale costs and competing interests are considered. A headline property value can suggest wealth even where a sale would leave little, nothing or a shortfall.
Some of this is recognised in the current rules. Mortgage debt is deducted, and up to £100,000 of equity in a main residence can ordinarily be disregarded. Further rules apply where the property itself is the subject matter of the dispute. Even then, a remaining share can place a low-income parent above the £8,000 threshold.
The Government’s own analysis suggested that almost all recipients of passporting benefits who would fail the civil capital assessment would do so because they were homeowners, rather than because they held savings or other capital.
The issue is not mainly hidden wealth. It is the difference between an asset with theoretical value and money available to pay a lawyer.
Legal aid cannot ignore genuine wealth simply because someone would prefer not to use it. But family cases are rarely simple: a parent may share ownership with the other party, a child may remain in the property, and neither owner may have the income to borrow against it.
The real question is whether the applicant can turn that interest into money when legal help is required. A property may produce value eventually. That does not mean it can finance a solicitor for a hearing next month.
What the means test already recognises about cars
A vehicle in regular use is excluded from the capital assessment if it is worth less than £15,000 or was bought more than three years ago. If bought within the previous three years, outstanding finance is deducted and only net equity above £15,000 is counted.
Cars and homes have different rules, but the principle is relevant: market value is not always usable capital, and attached finance matters. A jointly owned, mortgaged home deserves the same realism.
The reform has already been designed
The Legal Aid Means Test Review proposed raising the lower civil capital threshold from £3,000 to £7,000, the upper threshold from £8,000 to £11,000 and the main-residence equity disregard from £100,000 to £185,000.
It also proposed removing the £100,000 cap on the disregard for property that is itself the subject matter of the dispute and creating a mandatory disregard for non-monetary capital that genuinely cannot be sold or borrowed against.
The Government’s 2023 response accepted those principles. Yet the wider reforms remain unimplemented. In July 2026, the Justice Committee called for the Means Test Review to be implemented immediately and for the proposed thresholds to be updated using current cost-of-living data.
The policy foundation exists. What is missing is implementation.
Scope, alternatives and practical support
Prescribed domestic-abuse evidence may bring certain private family matters within the scope of legal aid under LASPO, but scope, merits and means remain separate requirements. A parent can therefore have qualifying evidence and still fail the capital assessment.
The capital test can also create an uneven contest. Where both parties make serious allegations but only one receives funded representation, a property interest may leave the other facing proceedings alone before the allegations are determined.
When legal aid is unavailable, direct access is often presented as the cheaper route because it removes the solicitor. In practice, availability can make that comparison misleading.
In cases I have supported, clients have found that lower-cost junior counsel was available through a solicitor but not for direct instruction. In one example, the lowest direct-access option was around one and a half times the fee quoted through the solicitor.
This will not happen in every case, but removing the solicitor does not automatically reduce the advocacy cost. The pool available for direct instruction may be narrower, while the client may still handle correspondence, filing and deadlines.
When legal aid and private representation are both out of reach, McKenzie Friend support often becomes part of the practical answer. The role is limited: McKenzie Friends do not ordinarily conduct litigation or have automatic rights of audience. But where the real choice is between structured practical support and no support, that role should not be dismissed.
A competent McKenzie Friend can help organise papers, prepare for hearings and keep a parent focused in court. In cases involving serious allegations, vulnerability or complex evidence, qualified legal advice may be important, and the limits of McKenzie Friend support must remain clear.
Recognising that practical value does not weaken the case for properly funded legal aid. It reflects what families do when legal aid and private representation are unaffordable.
The wider cost of leaving people unsupported
Legal aid is often discussed only as an expense. But reducing access to early advice may simply move the cost elsewhere.
Unrepresented parents may struggle with procedure, evidence and deadlines. That may contribute to avoidable applications, additional hearings and judicial time spent on procedural matters that earlier advice could have addressed.
This does not mean every litigant in person causes delay, or that representation would remove the backlog. Legal-aid savings should not be measured in isolation. The Justice Committee has warned that declining legal-aid availability and rising self-representation undermine efficient court administration. Timely advice can prevent escalation, narrow issues and use court time more effectively.
A test of real ability to pay
The means test must continue to examine genuine wealth, but it must distinguish between ownership, paper equity and money that is actually available.
Implementing the Means Test Review’s proposed threshold increases and its mandatory disregard for genuinely inaccessible capital would not grant legal aid to every homeowner. It would make the assessment reflect whether an asset can fund legal services when needed.
The assessment should ask not only what someone owns on paper, but what they can realistically use to pay for legal help now.
A system that accepts a parent has too little income to live without Universal Credit but assumes the same parent can fund family proceedings from a home they cannot sell or borrow against, is measuring only part of their financial reality.