Legal Services Corporation Will Receive $50 Million in Coronavirus Stimulus Bill

March 26, 2020

WASHINGTON – The Legal Services Corporation (LSC) will receive $50 million in the $2 trillion stimulus package passed by the Senate last night to stabilize households and businesses affected by the coronavirus outbreak. The funding would help LSC’s 132 grantees assist low-income clients facing job losses, evictions and other problems stemming from the pandemic. 

“We are grateful that Congress has recognized that COVID-19 is going to dramatically increase the life-altering civil legal needs faced by low income Americans and that legal aid can make a meaningful difference in addressing those needs,” said LSC President Ronald S. Flagg.

LSC anticipates that COVID-19 will cause a significant spike in the need for legal services among the nation’s low-income population. Higher rates of eviction and unemployment will likely impact the majority of clients LSC’s grantees serve. Legal aid will also be essential to low-income families unable to access healthcare and seniors facing a variety of scams.

Concerns have already been raised about a likely increase in the rate of domestic violence due to the stress and isolation associated with COVID-19 prevention efforts. LSC’s grantees will play an important role in helping survivors obtain and enforce protective orders. 

Individuals who depend on legal aid are typically hit the hardest during economic downturns. An uncertain economy is likely to result in more Americans qualifying for LSC-funded legal aid, households with incomes at or below 125% of the poverty level. LSC estimates that it will cost at least $100 million to address the anticipated increase in legal services needed.

Legal services providers are already struggling in the face of COVID-19. Of particular concern is that the Federal Reserve’s decision to lower interest rates close to zero will have a harmful impact on funding through interest on lawyers trusts accounts. These accounts are a vital source of funding for civil legal aid providers across the country. Texas Access to Justice Foundation Executive Director Betty Balli Torres estimates a monthly loss of nearly $1 million for her organization which funds 37 legal aid organizations, law school clinics and pro bono organizations. On average, LSC-funded organizations receive 5.4% of their funding from these accounts.  

Legal services providers also face financial pressure in obtaining the necessary equipment and technology to allow staff to work remotely and connect with clients.

The stimulus package will now head to the House of Representatives where it is expected to pass. The White House is expected to sign the legislation by the end of the week. 

Legal Services Corporation (LSC) is an independent nonprofit established by Congress in 1974 to provide financial support for civil legal aid to low-income Americans. The Corporation currently provides funding to 132 independent nonprofit legal aid programs in every state, the District of Columbia, and U.S. territories.