Editing Means test

{{short description|Determination of whether an individual or family is eligible for government assistance}}

A '''means test''' is a determination of whether an individual or family is eligible for government benefits, assistance or [[welfare spending|welfare]], based upon whether the individual or family possesses the means to do with less or none of that help.

== Canada ==
{{main|Social programs in Canada}}
In Canada, means tests are used for [[Student loan|student finance]] (for [[post-secondary education]]), [[legal aid]], and "[[welfare spending|welfare]]" (direct [[transfer payments]] to individuals to combat poverty). They are not generally used for primary and secondary education which are tax-funded. Means tests for [[public health insurance]] were once common but are now illegal, as the [[Canada Health Act]] of 1984 requires that all the provinces provide [[universal healthcare]] coverage to be eligible for subsidies from the federal government. Means tests are also not used for pensions and seniors' benefits, but there is a [[clawback]] of [[Old Age Security]] payments for people making over $69,562 (in 2012). The [[Last Post Fund]] uses a means test on a deceased veteran's estate and surviving widow to determine whether they are eligible for federal funding to subsidize their funeral.<ref name="macleans LPF">{{cite news|last1=Brewster|first1=Murray|title=Veterans burial fund has more money, but access still restricted: budget office|url=http://www.macleans.ca/news/canada/veterans-burial-fund-has-more-money-but-access-still-restricted-budget-office/|access-date=29 November 2014|agency=The Canadian Press|publisher=Macleans|date=4 November 2013}}</ref>

==United Kingdom==
{{see also|Welfare state in the United Kingdom}}
Resentment over a means test was among the factors giving rise to the [[National Unemployed Workers' Movement]] in the [[United Kingdom]].<ref>{{Cite web |url=http://www.wcml.org.uk/contents/protests-politics-and-campaigning-for-change/unemployment/national-unemployed-workers-movement/ |title=National Unemployed Workers Movement}}</ref> Today, '''means-tested benefits'''—meaning that entitlement is affected by the amount of income, savings, capital and assets— is a central feature of the benefit system.<ref>{{Citation | last = D'Arcy | first = Cliff | title = The Financial Times Guide to Managing Your Money | year = 2009 | pages = 159 | publisher = Financial Times | isbn = 978-0-273-71703-4}}</ref> Means testing is also part of the determination of [[legal aid]] in a [[Magistrates' court (England and Wales)|magistrates court]] and for the higher [[Crown Court]]. The means test is based on income, family circumstances and essential living costs.<ref>{{Cite web|url=https://www.gov.uk/guidance/criminal-legal-aid-means-testing |date=1 June 2014 |title=Criminal legal aid: means testing|website=GOV.UK|language=en|access-date=2020-02-26}}</ref>
The [[Beveridge Report]] of 1942 proposed a system of contributory benefits which would leave only a residual role for means-tested benefits which were then called [[National Assistance]].
The income limits are specified in relation to the needs of a household and for savings there are [[Capital rule|upper limits]] for some of the benefits. A couple who are not married may be treated as [[Cohabitation in the United Kingdom|living together as a married couple]].

The main means-tested benefits in 2019 were:

* [[Income Support]]
* Income-based [[Jobseeker's Allowance]]
* Income-related [[Employment and Support Allowance]]  
* [[Pension Credit]] 
* [[Universal Credit]]
* [[Housing Benefit]]
* [[Working Tax Credit]]
* [[Child Tax Credit]]
Receipt of such benefits other than [[Housing Benefit]] and tax credits is a passport to other non-cash help such as [[free school meals]], free [[prescription charges]], [[Legal Aid]], [[cold weather payment]]. The claimant, their partner and dependent children are covered. The rules for  free [[NHS dentistry]] and [[Eye care in the United Kingdom|optical charges]] have become more complex since the introduction of [[Universal Credit]] and have led to many people facing financial penalties, often wrongly.<ref>{{cite news |title='Go to the dentist and get fined £100' |url=https://www.bbc.co.uk/news/education-41639456 |first1=Sean |last1=Coughlan |accessdate=15 April 2019 |publisher=BBC |date=18 October 2017}}</ref>
People who are not entitled to any of the qualifying benefits may be able to qualify for help with health charges by a separate means test, the [[NHS Low Income Scheme]].
Defunct benefits include:
* [[National Assistance]]
* [[Supplementary Benefit]]
* [[Family Credit]]
* [[Family Income Supplement]]
* [[Social Fund (UK)]]

==United States==
{{USBankruptcy}}

Means testing is used to test for eligibility to [[Medicaid]], [[Temporary Assistance for Needy Families]], [[Section 8 (housing)|Section 8 housing]], [[Supplemental Nutrition Assistance Program]], [[Pell Grant]], [[Federal Supplemental Educational Opportunity Grant]], [[Federal Work-Study Program]], direct subsidized student loans, as well as the eligibility for relief for debtors who have sufficient financial ''means'' to pay a portion of their debts.<ref>''Understanding Bankruptcy.'' Second Edition. Jeff Ferriell and Edward J. Janger. LexisNexis. 2007. p. 28.</ref> The means test is perhaps best recognized in the United States as the test used by courts to determine eligibility for [[Title 11 of the United States Code]] [[Chapter 7 bankruptcy|Chapter 7]] or [[Chapter 13 bankruptcy]].

During the [[Great Depression]] in the 1930s, the test was used to screen applicants for such programs as [[Home Relief]], and starting in the 1960s, for benefits such as those provided by Medicaid and the Food Stamp Program.

In 1992, third-party presidential candidate [[Ross Perot]] proposed that future [[Social Security (United States)|Social Security]] benefits be subjected to a means test;<ref>{{cite journal|last1=McSteen|first1=Martha|title=Fifty Years of Social Security|journal=Social Security Bulletin|year=1985|volume=48|issue=8|pages=36–44|url=http://www.ssa.gov/history/50mm2.html|publisher=Social Security Administration|pmid=3901340|access-date=9 September 2014|quote=It should be supplemented by effective private pensions, individual insurance, savings, and other investments; and it should be undergirded by effective means-tested programs.}}</ref> though this was hailed by some as a potential solution to a purported impending crisis in funding the program, few other political candidates since Perot have publicly made the same suggestion, which would require costly investigations and might associate accepting those benefits with [[social stigma]].

In 2005, the US substantially changed its [[Bankruptcy in the United States|bankruptcy laws]], adding a means test to prevent wealthy debtors from filing for Chapter 7 Bankruptcy. The most noteworthy change brought by the [[Bankruptcy Abuse Prevention and Consumer Protection Act|2005 BAPCPA amendments]] occurred within {{usc|11|707(b)}}. The amendments effectively subject most debtors who make an income, as calculated by the Code, above the median income of the debtor's state to an income-based test.<ref name="CSM"/> This is referred to as the "means test". The means test provides for a finding of abuse if the debtor's income is higher than a specified portion of their debts. If a presumption of abuse is found under the means test, it may be rebutted only in the case of "special circumstances".<ref>[http://www.bknevada.com/index.php/chapter-7-liquidation/subchapter-i-officers-and-administration/707-dismissal-of-a-case-or-conversion-to-a-case-under-chapter-11-or-13 11 U.S.C. § 707(b)(2)(B)]</ref>

Debtors whose income is below the state's median income are not subject to the means test. The Code-calculated income may be higher or lower than the debtor's actual income at the time of filing for bankruptcy. This has led some commentators to refer to the bankruptcy code's "current monthly income" as "presumed income".  If the debtor's debt is not primarily [[consumer debt]], then the means test is inapplicable.

Thus, the means test is a formula designed to keep filers with higher incomes from filing for Chapter 7 bankruptcy. These filers may use Chapter 13 bankruptcy to repay a portion of their debts, but may not use Chapter 7 to wipe out their debts altogether.<ref name="CSM">{{cite news|last1=Pyles|first1=Sean|title=Why the bankruptcy means test matters|url=https://www.csmonitor.com/Business/Saving-Money/2016/0718/Why-the-bankruptcy-means-test-matters|access-date=16 December 2017|publisher=Christian Science Monitor|date=18 July 2016}}</ref> The bankruptcy means test is complex and the terms that govern many parts of it – including those terms that control whether it applies at all – are of unsettled definition.<ref>[http://www.abanet.org/media/youraba/200901/article08.html Abanet.org]</ref>

==Other examples==
Other examples of means testing include Medifund in Singapore<ref>[http://www.geraldtan.com/medaffairs/meanstest.html Means Testing for Medical Subsidies]</ref> and [[Medical card|medical cards]] in Ireland. Both are used in the healthcare sector. Australia uses a means test for its [[Age Pension]].

==See also==
*[[Entitlement program|Entitlement]]
*[[Entitlement theory]]
*[[Social welfare]]
*[[Conditional cash transfer]]

== References ==
<references/>

== External links ==
* [http://www.usdoj.gov/ust/eo/bapcpa/meanstesting.htm U.S. Bankruptcy Courts information on means testing]
* [http://www.legalservices.gov.uk/criminal/getting_legal_aid/eligibility_calculator.asp LSC (UK) means-tested eligibility calculator]

{{DEFAULTSORT:Means Test}}
[[Category:Welfare economics]]
[[Category:United States bankruptcy law]]
[[Category:Social security]]
[[Category:Welfare reform]]
[[Category:Poverty law]]