A quarter of a million more ­people will qualify for help with social welfare problems following a 5% rise in the cut-off threshold for civil legal aid, the Ministry of Justice announced last week.

Lord Bach, legal aid minister, told the Advice Services Alliance conference in London that the change would come into effect from 6 April. The extra £3.5m cost would come from within the existing budget, he said.

Bach said that the current £2bn legal aid budget needs to be rebalanced as too much of it, £1.2bn, is spent on crime.

‘In the civil area, and in ­particular the social welfare field, the system has failed the very people it was set up to ­protect,’ he said.

The Law Society has urged the MoJ to reconsider the level of legal aid provision in a recession, and called for a debate on eligibility, especially for home-owners threatened with repossession.

In his speech, Bach said he hoped that a report on the impact of the recession on local legal aid providers would be completed by the end of April, but its results would not change the fixed fee system.

He confirmed that the MoJ and Legal Services Commission are still working towards a start date of April 2010 to begin the new civil contract. Firms and not-for-profit groups have said that the schedule does not leave them with enough time to ­prepare.