Little Andrew: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeLittle Andrew: Questions for Oral Answer — Questions to Ministers[Sitting date: 19 September 2013. Volume:693;Page:13548. Text is incorporated into the Bound Volume.]7.ANDREW LITTLE (Labour) to theMinister of Justice: What factors were taken into account in setting the interest rate on legal aid debt under regulation 14 of the Legal Services Regulations 2011 at 8 percent?Hon JUDITH COLLINS (Minister of Justice): Legal aid has always been a loan not a grant. The charging of interest on legal aid debt was set by Cabinet in 2011 as one of several changes aimed at bringing the ballooning legal aid debt under control. This was included in the Legal Services Bill when it was first introduced. The regulations provide for interest to be charged at the capital charge rate that is used by departments and Crown entities as it reflects the cost to the Crown of lending that money. Any person who is unable to repay their legal aid debt can apply to the Legal Services Commissioner who can write off the debt if he is satisfied that it could cause serious hardship.Andrew Little: Given that the purpose of the Legal Services Act is to provide “legal services to people of insufficient means;” how does she justify charging interest of 8 percent to the woman inWainuiōmata who has a legal aid debt incurred obtaining orders to protect herself and her children from her abusive ex-husband and who works 30 hours a week in a low-paid job and for whom the $75 a week extra needed to pay off the debt by March next year and the extra needed to pay interest will cause her serious hardship?Hon JUDITH COLLINS: As that member well knows if that particular woman would like to contact the commissioner of legal aid—in fact he has already indicated that he is going to be very generous in looking at these cases. The member has already stated that it will cause serious hardship in which case she would not have to repay that particular debt. I would also just like to confirm for the member because he may not be aware that of the $120 million a year that is spent on legal aid at the moment only 25 percent of cases do not have their debt waived. So in other words in only 25 percent of cases does the debt ever have to be repaid.Andrew Little: What does the Minister say to the grandmother in Upper Hutt who owes over $2000 after obtaining orders to protect her grandson—now 9 years old—and who lives on a pension and cannot afford higher payments or interest payments without facing severe hardship?Hon JUDITH COLLINS: Well I would expect that that particular person would also not be one of the people who would need to pay any interest given the—Andrew Little: Well why weren’t they told that?Hon JUDITH COLLINS: One of the comments from the member seems to be that he expects that the commissioner of legal aid would know the personal circumstances of all of the 60000 people who have been written to and frankly that is not acceptable. In fact he has already indicated that there is a 6-month period of grace for anyone to write in and explain their circumstances and it would be waived.Andrew Little: Does she accept that people of insufficient means who use legal aid to protect themselves and their children from violent and abusive situations—most of whom are women—have already done the community a favour and that charging 8 percent interest on any debt is just punishing them?Hon JUDITH COLLINS: Well I certainly say to that member that I believe that those women have done the community a favour in holding violent males who abuse women to account and well done to them. Having said that I would say that it is very unlikely that most of them would ever have to repay that debt.