A means test is a determination of whether an individual or family is eligible for government assistance or

welfare Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...

, based upon whether the individual or family possesses the means to do without that help.

Canada

In Canada, means tests are used for student finance (for post-secondary education),

legal aid Legal aid is the provision of assistance to people who are unable to afford legal representation and access to the court system. Legal aid is regarded as central in providing access to justice by ensuring equality before the law, the right to c ...

, and "

" (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 Publicly funded healthcare is a form of health care financing designed to meet the cost of all or most healthcare needs from a publicly managed fund. Usually this is under some form of democratic accountability, the right of access to which are se ...

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 The Last Post Fund is a Canadian non-profit organization and registered charity which was founded in 1909. The Last Post Fund’s mission is to ensure that "no Veteran is denied a dignified funeral and burial, as well as a military gravestone, due ...

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.

United Kingdom

Resentment over a means test was among the factors giving rise to the National Unemployed Workers' Movement in the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and ...

. 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. Means testing is also part of the determination of

in a

magistrates court A magistrates' court is a lower court where, in several jurisdictions, all criminal proceedings start. Also some civil matters may be dealt with here, such as family proceedings. Courts * Magistrates' court (England and Wales) * Magistrate's Cou ...

and for the higher

Crown Court The Crown Court is the court of first instance of England and Wales responsible for hearing all indictable offences, some either way offences and appeals lied to it by the magistrates' courts. It is one of three Senior Courts of England and W ...

. The means test is based on income, family circumstances and essential living costs. The

Beveridge Report The Beveridge Report, officially entitled ''Social Insurance and Allied Services'' ( Cmd. 6404), is a government report, published in November 1942, influential in the founding of the welfare state in the United Kingdom. It was drafted by the Li ...

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 upper limits for some of the benefits. A couple who are not married may be treated as 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 Pension Credit is the principal element of the UK welfare system for people of pension age. It is intended to supplement the UK State Pension, or to replace it (for example, if the claimant did not meet the conditions to claim a State Pension). I ...

* Universal Credit * Housing Benefit * Working Tax Credit *

Child Tax Credit A child tax credit (CTC) is a tax credit for parents with dependent children given by various countries. The credit is often linked to the number of dependent children a taxpayer has and sometimes the taxpayer's income level. For example, in ...

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 Legal aid is the provision of assistance to people who are unable to afford legal representation and access to the court system. Legal aid is regarded as central in providing access to justice by ensuring equality before the law, the right to c ...

, cold weather payment. The claimant, their partner and dependent children are covered. The rules for free NHS dentistry and optical charges have become more complex since the introduction of Universal Credit and have led to many people facing financial penalties, often wrongly. 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 The NHS Low Income Scheme is intended to reduce the cost of NHS prescription charges, NHS dentistry, sight tests, glasses and contact lenses, necessary costs of travel to receive NHS treatment, NHS wigs and fabric supports, i.e. spinal or abdom ...

. Defunct benefits include: * National Assistance * Supplementary Benefit * Family Credit * Family Income Supplement * Social Fund (UK)

United States

Means testing is used to test for eligibility to

Medicaid Medicaid in the United States is a federal and state program that helps with healthcare costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, including nursing home care and per ...

Temporary Assistance for Needy Families Temporary Assistance for Needy Families (TANF ) is a federal assistance program of the United States. It began on July 1, 1997, and succeeded the Aid to Families with Dependent Children (AFDC) program, providing cash assistance to indigent ...

, Section 8 housing,

Supplemental Nutrition Assistance Program In the United States, the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, is a federal program that provides food-purchasing assistance for low- and no-income people. It is a federal aid program, ad ...

, Pell Grant,

Federal Supplemental Educational Opportunity Grant The Federal Supplemental Educational Opportunity Grant, more commonly known by its acronym SEOG, is a federal assistance grant reserved for college students with the greatest need for financial aid to attend school. To be eligible for this grant, ...

Federal Work-Study Program The Federal Work-Study program originally called the College Work-Study Programhttp://www.ed.gov/programs/fws/index.html The Department of Education : Federal Work Study and in the United States frequently referred to as just "Work-study", is a ...

, 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. 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 or

Chapter 13 bankruptcy Title 11 of the United States Code sets forth the statutes governing the various types of relief for bankruptcy in the United States. Chapter 13 of the United States Bankruptcy Code provides an individual with the opportunity to propose a plan of ...

. During the

Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...

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 Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...

benefits be subjected to a means test; 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 laws, adding a means test to prevent wealthy debtors from filing for Chapter 7 Bankruptcy. The most noteworthy change brought by the 2005 BAPCPA amendments occurred within . 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. 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". Debtors whose income is below the state's median income are not subject to the means test. Notably, 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. 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.

Other examples

Other examples of means testing include Medifund in SingaporeMeans Testing for Medical Subsidies
/ref> and Medical Cards in Ireland. Both are used in the healthcare sector. Australia uses a means test for its Age Pension.

References

External links