According to a recent report from the National Energy Assistance Directors Association (NEADA), more than 20 million Americans are behind on their utility bills. This is primarily due to a combination of factors, including surging inflation and rising energy costs. Currently, the typical utility cost ranges from $400 to $800. Climate change, which has brought record-breaking summer heat waves, has not made things easier, particularly for low-income families.

For low-income and middle-income American families, increases in energy prices have hit them the hardest. For the lowest 20% of household incomes, energy costs increased by over $1,000 in 2021. For middle-income Americans, costs rose by over $1,300.

What is Energy Inflation?

Another recent survey found that the bottom 40% of low-income families have been hit the hardest by energy inflation. This has forced them to choose between paying their energy bills and essential goods and services. In many of these cases, federal utility assistance (LIHEAP) is necessary.

What is LIHEAP?

The Low Income Home Energy Assistance Program (LIHEAP) assists qualified low-income households with heating and cooling bills, bill payment assistance, energy crisis assistance, weatherization, and energy-related home repairs. LIHEAP benefits are available to help low-income households, particularly households with high energy burdens, the elderly, the disabled, and those with children.

Income Requirements of LIHEAP

To provide LIHEAP updates of the FPG, which the U.S. Department of Health and Human Services (HHS), Office of the Assistant Secretary for Planning and Evaluation (ASPE) issued on January 21, 2022, grantees that use the guidelines may provide that information to their customers in April 2022, and need to create or update their programs for FFY 2023 before the guidelines are issued.

Section 2605(b)(2)(B) of Public Law 97-35, 42 U.S.C. § 8624(b)(8)(B), establishes the following requirements that LIHEAP grant recipients must follow in setting the income-eligibility criteria of their programs:

(1) Grant recipients may make eligible solely on the basis of household income which does not exceed the greater of

(A) an amount equal to 150 percent of FPG for the State; or

(B) an amount equal to 60 percent of the State Median Income (SMI) for the State; and

(2) Grant recipients may not be excluded from eligibility solely on the basis of household income which falls below 110 percent of FPG for such State—through grant recipients may give priority to those households with the highest home energy costs or needs in relation to household income.

Federal Income Eligibility Range

As LIHEAP grantees, you must set income eligibility according to the Low Income Home Energy Assistance Program (LIHEAP) section of the Code of Federal Regulations, as shown in Attachment 2.

Household

Because the definition of household in the LIHEAP statute may be interpreted inconsistently by caselaw, states should regularly review their interpretation of Section 2603(5) of the LIHEAP statute.

Income

The LIHEAP statute does not define income, so many grantees have chosen to use net income to deduct for medical expenses over a certain level, or for some very limited expenses associated with employment such as childcare.