Sociology Index

MEANS TEST AND MEANS TESTING

Means Test is a policy for the provision of social assistance or services which determines access by considering whether the applicant has the means to provide for the service from their own resources.

Means test is an official inquiry into an applicant's private resources, determining or limiting a grant or allowance of money from public funds. Subject a person to a means test and assess a grant by a means test. Means-testable is subject to a means test.

Legal aid in most provinces, for example, is means tested; legal aid is provided without charge to those unable to pay while others pay part or all of the cost of the service. A policy of universality is opposed to this and is one in which all citizen have a right to assistance or service without charge.

In the past, for example, the ‘baby bonus’ was offered to all mothers of children. Similarly, health care is now offered to all citizens without charge regardless of their income. There is a growing tendency towards means tests, however.

Old age income support is now ‘clawed back’ from seniors with incomes over a certain amount, for example, and in the future will only be given to those with income below a set amount.

Do the ends justify the means test? House-passed bill designed to reduce Ch. 7 filings by consumers is not the best means of increasing their payments to creditors
Leta, David E., ALM Media, Inc. The National Law Journal
Abstract: HR 3150, the bankruptcy reform bill passed by the House of Representatives, bars access to Chapter 7 to many debtors with the future income to pay creditors, and to obtain discharges, these debtors would have to file repayment plans under Chapter 13. Supporters of this bill argue that the former system allows individual debtors to avoid taking enough personal responsibility for their financial problems, and the bill is backed by the consumer credit and lending industries. The bill adopts "means testing" for Chapter 7, which has never been part of the Bankruptcy Code.

The universal means test - Economist Newspaper Ltd., The Economist (UK)
Abstract: Welfare reform in the United Kingdom is increasingly geared toward means testing. The welfare state was originally seen as providing everyone with benefits, with everyone paying in contributions. Means testing can give rise to poverty traps and may be seen as humiliating. The Labor party is divided on this issue. Social insurance is expensive, and this means that it is difficult both to provide help for the needy, and to keep taxes at a politically acceptable level.

Does the Owner-Occupier Exemption from the Pensions Means Test Affect Housing Choice of the Elderly? Evidence from Australia - Renuka Sane, John Piggott, University of New South Wales - Australian School of Business - School of Economics
Abstract: Many developed economies offer the elderly a means tested pension; in most cases the owner occupied home receives preferential treatment. Such policies create price distortions which will adversely affect household choice in an important market, and which has the potential to generate a serious economy-wide misallocation of resources. We study the impacts of the owner occupied exemption for residential choice among Australia's elderly, many of whom enjoy access to a means tested age pension, by estimating a model of trade-down behaviour conditional on mobility, using the Household, Income and Labour Dynamics (HILDA) data set spanning 5 years from Australia. Results suggest that the exemption of the owner-occupied home in the age pension means test generates sticky trade-down behaviour, consistent with resource misallocation.

Living with the Means Test
Charles Jordan Tabb, University of Illinois at Urbana-Champaign College of Law
Jillian McClelland, University of Illinois College of Law
U Illinois Law & Economics Research Paper No. LE07-004
The heart of the consumer debtor crackdown came in the adoption of a strict means test as a method of proving abuse. This article explores the impact of the means test on the players in the bankruptcy system. First, we discuss abuse testing in the Bankruptcy Code, and note particularly the influence that the consumer credit lending industry exercised in bringing about the 2005 Amendments. Next, we turn to the statute to perform a detailed analysis of the provisions of the means test and its necessary calculations and confusing permutations. Failing or passing the means test is not the end of the story, of course. From there, we consider how a debtor can rebut the presumption of abuse should he fail the means test, and how abuse may nonetheless be found should he pass. We observe that new procedural provisions will add teeth to the means test determination; specifically, through required trustee reports and abuse motions.

Economic Impact of a Proposed AGI Means Test on Representative Crop Farms
Richardson, James W., Outlaw, Joe L., Raulston, J. Marc - Texas A&M University
Abstract: The Administration has proposed revising the AGI means test for eligibility to farm program payments. The 2002 farm bill excludes producers from farm program payments (CCP, DP, and MLG/LDP) if their average adjusted gross income (AGI) for three preceding years exceeds $2.5 million and less than 75% of their AGI comes from farming, ranching or forestry operations. The revised means test would reduce the AGI cut-off to $200,000 and repeal the 75% exclusion.