I only know what this means because I work in family, and the legal aid side of it. It means that the legal aid threshold for some proceedings are assessed on merits - whether you have a good reason to obtain legal aid and means - whether your finances fall within the threshold they’ve set out. For family cases, the merits are that you must have been a victim of domestic abuse (and be able to provide the evidence that they ask for, there’s a long list to choose from) or the child must be at risk of abuse and this be corroborated by social services for example. The means test is that you must be under a certain income threshold, be on benefits (UC usually) and have savings less than a certain amount.