A means test is an evaluation of someone's finances to determine whether or not that person qualifies for financial assistance. Means tests are used for things like finding out whether or not someone qualifies to file bankruptcy, is eligible for food stamps, or can apply to receive housing vouchers. The standards for such tests are set by the government, and they are regularly adjusted with the goal of ensuring that means tests reflect current standards of living.
In a means test, all sources of income and expenses are documented. Sometimes a means test is purely income-based, which means that people with incomes above a certain level will be automatically excluded. Other means tests consider factors like high expenses; for example, someone may have an income which appears high, but have a very high mortgage payment and other expenses. In these cases, even though someone makes a lot of money on paper, she or he may still be eligible for assistance.
The documentation used to support applications for things like food stamps, assistance with health care expenses, housing vouchers, and other aid is evaluated by a government representative who is familiar with the standards of the means test. If the person qualifies, the assistance can be authorized. If the person does not, assistance will be denied, although an opportunity to appeal may be provided.
The investigative process behind the means test is designed to uncover concealed income and other facts which may be relevant to the application. People who behave fraudulently in the course of applying for government assistance can be penalized, although honest mistakes will not be punished as long as they are corrected.
It is important to note that passing one means test does not automatically mean that someone will pass all such tests. The standards for each are different, and thus the process must be repeated for different kinds of assistance. For example, someone who qualifies for food stamps does not automatically qualify to file bankruptcy.
Some applicants for assistance find the means test humiliating, especially during economic downturns when many citizens are needy. People who apply for government assistance may already feel embarrassed that they have to ask for help, and the process of having income and expenses scrutinized can be uncomfortable. There may also be some resentment of the process, as people may feel that the government is treating them with suspicion instead of simply accepting that they need assistance and granting aid.
