Advertiser Disclosure
X

Advertiser Disclosure: The credit card and banking offers that appear on this site are from credit card companies and banks from which MoneyCrashers.com receives compensation. This compensation may impact how and where products appear on this site, including, for example, the order in which they appear on category pages. MoneyCrashers.com does not include all banks, credit card companies or all available credit card offers, although best efforts are made to include a comprehensive list of offers regardless of compensation. Advertiser partners include American Express, Chase, U.S. Bank, and Barclaycard, among others.

  • Date

By

Dig Deeper

27,241FansLike
26,464FollowersFollow
43,730FollowersFollow

Become a Money Crasher!
Join our community.

How to Get Help With Heating Costs Through LIHEAP – Eligibility & Benefits

On a cold January day, a single mother huddles on the couch with her two children, a blanket wrapped around them for warmth. The temperature in the apartment is set at 50 degrees Fahrenheit. She’d like to turn up the heat, but she knows she can’t afford it.

With the money from her minimum-wage job, she was just able to make ends meet during the comparatively mild summer. But now, the winter chill has sent her heating bills sky-high. And every additional dollar she spends on heating is a dollar she doesn’t have to buy groceries to feed her kids.

This isn’t just a sad story — for many Americans, it’s the way they live. According to Inside Energy, economist Roger Colton, who has three decades of experience studying home energy affordability, says spending 6% of your income on home energy costs is the benchmark for “affordable.” But according to a 2018 report from the United States Department of Energy, energy bills for low-income families in many states add up to 8%, 10%, or even 12% of their total income. That forces many families to choose between heating their homes and paying for other needs, such as food and health care.

The Low Income Home Energy Assistance Program, or LIHEAP, exists to help with this problem. LIHEAP provides financial assistance to low-income households to help them pay for heating in the winter and home cooling in the summer. In turn, this reduces their risk of health problems, such as heat-related illness, and safety problems, such as fires caused by attempting to heat their homes with candles or stove burners.

What LIHEAP Does

Congress started LIHEAP in 1981 to help people deal with high heating bills, especially in the Northeast. In 1984, it expanded the program to cover both heating and cooling costs in all areas of the country. The money LIHEAP provides saves families from having to make the painful choice of “heating or eating.”

LIHEAP is a partnership between the federal Administration for Children and Families (ACF), a division of the U.S. Department of Health and Human Services, and state governments. The ACF funds the program through block grants to the states, which are in charge of getting the money to people in need. Each state runs its own LIHEAP program and has its own rules about aid distribution.

States can use their LIHEAP funds to help people with their home energy costs in several different ways:

  • Paying Energy Bills. The bulk of LIHEAP funding goes to help both homeowners and renters pay their home energy bills. According to the ACF, in 2017, states spent $1.8 million in LIHEAP funds on heating assistance and $2.3 million on cooling assistance. An estimated 5.4 million households received help with their heating bills through LIHEAP that year.
  • Dealing With Crises. States must set aside some of their LIHEAP funds to help people deal with disasters that affect home heating and cooling. For example, if a major winter storm knocks out power to part of a state, the state can use LIHEAP funds to help the families in that area stay warm until the power comes back. In 2017, LIHEAP spent around $575 million on crisis assistance.
  • Weatherizing. States can use a portion of their LIHEAP funds to help people improve energy efficiency in their homes. For instance, they can use the money to add insulation or fix leaky doors and windows. Simple changes like these can help families lower their heating and cooling bills for years to come.
  • Making Repairs. In some states, LIHEAP also helps people with home heating or cooling repairs. For example, a person with a broken furnace or air conditioner could get money from the state to repair or replace it. States can also pay to help people replace old, inefficient heating and cooling systems and lower their energy bills.

Some states use slightly different names for their LIHEAP programs. For instance, Colorado calls its program the Low-Income Energy Assistance Program, or LEAP. However, it is still part of the federal LIHEAP program and receives its funding from federal taxes.

In addition, some states have other programs to help low-income consumers with energy bills. Examples include California Alternate Rates for Energy (CARE) and New Jersey’s Universal Service Fund (USF). These programs are not part of LIHEAP and are not federally funded.


Who Uses LIHEAP

According to the ACF, the federal government spent a total of $3.39 billion to fund LIHEAP in 2019. States are required to use this money to help low-income households.

LIHEAP recipients include the working poor, who struggle to make ends meet on low wages, and people making the transition from welfare to work. LIHEAP aid also helps those who can’t earn money to help themselves, including young children, the elderly, and the disabled. States are required to target benefits toward households with at least one member who belongs to one of these groups. They must engage in outreach to ensure these households know about the assistance LIHEAP offers and keep track of how many such households receive benefits from the program.

Even though millions of families now receive aid through LIHEAP, states turn away many millions more due to lack of funding. According to Inside Energy, only 22% of eligible households receive LIHEAP assistance. Under the LIHEAP program rules, states with limited money to spend must focus on getting aid to the families that need it most. That includes families paying the highest share of their income for energy costs and those at the highest risk of health problems.


Who Is Eligible for LIHEAP

The federal government designed the LIHEAP program to help low-income households. However, the definition of “low-income” varies widely from state to state. To deal with these differences, states can use several different methods to decide who’s eligible for LIHEAP aid.

The primary test for LIHEAP eligibility is the federal poverty guidelines (FPG). Using these guidelines, a household can qualify based on how its income compares to the poverty level set by the federal government for its home state. However, some states have other eligibility guidelines for LIHEAP. These include eligibility based on the median (middle) income in the state or other tests, such as which other forms of aid a family receives.

Eligibility Based on Federal Poverty Guidelines

Under federal law, a household can qualify for heating or cooling assistance from LIHEAP if its income is no higher than 150% of the FPG for their home state. As of 2020, the poverty level for most states is $26,200 for a family of four. Thus, a family of four can get aid if its income is at or below $39,300.

However, Alaska and Hawaii are exceptions to this rule. Because it’s so expensive to live in these states, the federal government has given them a higher cutoff poverty level. The poverty level for a family of four is $32,750 in Alaska and $30,130 in Hawaii. Thus, in those states, the qualifying income for LIHEAP is higher as well.

Although the federal cutoff for LIHEAP is 150% of the poverty level, a state can choose to set its own limit for LIHEAP eligibility at a lower level. However, this limit can’t be below 110% of the federal poverty level. For instance, Michigan currently uses a limit of 110% of the FPG for heating assistance and 150% of the FPG for cooling assistance. Thus, in Michigan, a family of four needs an income of $28,820 or less to qualify for heating aid from LIHEAP.

ACF provides a chart that shows the federal poverty guidelines for households of different sizes. If your household income is lower than 110% of this level, then you qualify for LIHEAP, no matter where you live.

However, if your household income is higher than this number, then whether you qualify for LIHEAP depends on your particular state’s rules. You can find out what these are by checking ACF’s current state-by-state percent of poverty table — or you can contact your state LIHEAP office directly.

Eligibility Based on State Median Income

In some states, incomes are much higher than the national average. For example, the Census Bureau provides data showing that the median income for a family of four in New Jersey is $128,994 as of March 2020. (The median income is the level that’s lower than half the incomes in the state and higher than the other half.)

However, this higher income also comes with a higher cost of living. So in New Jersey, a family with an income of $40,000 — which is higher than 150% of the poverty line — could still have trouble making ends meet.

These high-income states are allowed to set their upper income limit for LIHEAP aid as high as 60% of the state median income. Thus, New Jersey could legally extend assistance to a family of four with an annual income up to $77,396. A state can only use this method if 60% of its median income is higher than 150% of the federal poverty level.

However, qualifying states aren’t required to make their limits that high. Some high-income states choose to set the cutoff at a higher level than 150% of the federal poverty line but lower than 60% of the median state income. For instance, in New Jersey, a family of four can receive aid if its income is no higher than $52,400 — 200% of the federal poverty level.

As of 2020, 26 U.S. states use this rule to set their LIHEAP limits at more than 150% of the poverty level. Another 14 states have set the cutoff at exactly 150% of the poverty level, and the rest have a limit between 110% and 150% of the poverty level.

Eligibility Based on Other Forms of Aid

States are also allowed to automatically qualify people for LIHEAP if they receive certain other types of federal benefits. Under this rule, a household can receive LIHEAP if any person in it is taking part in:

  • Temporary Assistance for Needy Families. TANF is the program most often referred to as “welfare.” It provides aid to families living in poverty so children can stay with their parents while also helping the parents prepare for work.
  • Supplemental Security Income. The SSI program provides extra income to low-income people who are elderly, blind, or disabled. It’s not the same as Social Security, but the Social Security Administration runs it.
  • Supplemental Nutrition Assistance Program. SNAP is the program formerly known as food stamps. It provides money to people with low incomes to buy groceries.
  • Certain Veteran Benefits Programs. People can also qualify for LIHEAP if they receive certain types of veterans’ benefits. This rule applies only to needs-tested programs — that is, it’s limited to veterans with low incomes.

Stricter State Rules

The LIHEAP Act determines which people are allowed to receive LIHEAP aid under federal law. However, states can set stricter eligibility requirements for their LIHEAP programs if they choose.

For instance, they can limit benefits to people who:

  • Have less than a specific amount of money in the bank
  • Do not live in any kind of subsidized housing
  • Have already received a warning their provider plans to cut off their utilities

Since each state’s requirements are different, the best way to determine whether you meet the rules for your state is to contact your state LIHEAP office. You can find the office for your state or territory through ACF’s interactive LIHEAP locator map.


How States Calculate LIHEAP Benefits

The government didn’t design LIHEAP to cover the entire cost of every family’s heating or cooling bill. If you qualify for the program, the amount you receive in benefits is dependent upon several factors:

  • What Kind of Help You Need. In many states, LIHEAP provides help only with heating bills, so families can’t get aid for cooling at all. Some states also limit the assistance to a family’s primary heating source. For instance, a family with a gas furnace can get help with its gas bill but not with its electric bill, even if it also uses electric space heaters.
  • Your Energy Burden. Your household’s energy burden is the percentage of your income spent on heating and cooling bills. Households that have the lowest income and the highest bills get the biggest benefits. The state also takes your household size into account since that affects your energy needs.
  • Where You Live. Some states offer larger LIHEAP payments than others. Each state has only a limited amount to give and many households in need of help. The more households in need and the more energy costs in the area, the less money each household gets.

Unfortunately, there is no fixed rule to determine how much aid you can get from LIHEAP before you apply. LIHEAP doesn’t merely reduce your energy rates by a certain amount or refund a specific percentage of your bill. Instead, each household gets a different payment based on its particular circumstances.

When you apply, the state LIHEAP office will ask multiple questions about your situation, including your income, energy costs, and family size. All these factor into the size of the benefit you eventually get.

However, you can guess what your benefit is likely to be based on your state’s average. The LIHEAP Annual Report to Congress for Fiscal Year 2015 — the most recent year that’s available online — shows how the average LIHEAP benefit varied from state to state. The average annual heating benefit ranged from just $77 in sunny Oklahoma to $1,024 in frigid Alaska. The area with the highest annual cooling benefit was the District of Columbia, with an average of $712 — nearly as much as its $827 average for heating.

In most cases, winter heating benefits were higher than cooling benefits. More than half the states on the list paid no cooling benefits at all. However, a few states spent as much or more on cooling as they did on heating. These include Louisiana, South Carolina, Tennessee, Nebraska, and, surprisingly, New York, which paid out an average of $699 for cooling and only $457 for heating.


Signing Up for LIHEAP

Each state has its own LIHEAP program, and each program has its own rules. What it takes to qualify for LIHEAP, when you can apply, and how to apply all depend on where you live.

If you want to sign up for the program, you need to contact your local LIHEAP office, where a representative can explain to you how to apply and what to do if you’re denied. In some cases, you can also get information about LIHEAP through your local energy provider.

Finding Your Local Office

The first step in applying for LIHEAP is to contact your local LIHEAP office. There are three ways to find it:

  1. Call the National Energy Assistance Referral (NEAR) hotline at 866-674-6327. If you’re deaf or hard of hearing, you can call TTY 866-367-6228.
  2. Send an email to NEAR at energyassistance@ncat.org.
  3. Contact your state LIHEAP office via the ACF. The state office oversees all the local offices. If you’re a Native American tribe member, you can find your LIHEAP tribal contact through a different page on the ACF website.

Submitting an Application

Once you contact your local office, you can find out how to apply for LIHEAP. You can apply online in some states, while in others, you must send in a form or apply in person.

Depending on the state, you may also need to provide various documents to support your application. For instance, you may need to provide:

  • Proof of U.S. citizenship or permanent residence
  • Proof of your present address, such as a property tax bill or rent receipt
  • Proof of your income, such as a recent payroll stub
  • Documentation showing any other income you have, such as Social Security, unemployment, pensions, or disability benefits
  • Recent copies of your utility bills
  • A copy of the shut-off notice from your utility company (if you’ve received one)
  • Information about all other household members, such as Social Security cards, birth certificates, or school records

Appealing a Decision

Even if you meet all the requirements, there’s no guarantee the state will approve your LIHEAP application. Funding is limited, and the state can’t help everyone.

However, if you think your application has been wrongly denied, you can appeal the decision. The process for doing so should be outlined in the denial notice you receive. If it isn’t, you can contact the main LIHEAP office for your state, territory, or tribe for information regarding the appeals process.

Receiving Your Benefit

If the state approves your application, you will receive a payment to cover a portion of your energy bills for the year. The money you receive from LIHEAP is a one-time payment. If you would like to receive LIHEAP benefits again the following year, you must submit another application.

Unfortunately, being approved once is no guarantee of subsequent approval. If your income, energy bills, or family situation changes, you may no longer qualify for aid. And even if your situation has not changed, the state could still reject your application because it has too many applicants and not enough funds to go around.


Final Word

LIHEAP is the most extensive program that helps people with their heating and cooling bills, but it isn’t the only one. So even if you don’t qualify for LIHEAP, your local LIHEAP office may be able to help you find other resources for assistance.

For example, some states have government programs to help make energy bills more affordable for low- to moderate-income consumers who make too much money to qualify for LIHEAP. There are also special programs that provide credits for consumers who are elderly or disabled. Your LIHEAP office can also help you find special discounts available through your utility company or charities.

If your LIHEAP office doesn’t have this information, there are other places to try. The NEAR hotline can help you figure out which kinds of energy assistance are available in your area. You can also contact your local low-income energy office, which you can find through LIHEAP Clearinghouse.

There are also steps you can take to reduce your utility bills on your own or get help with other bills so you can afford your utilities. Projects like adding insulation or weatherstripping can lower your heating and cooling costs — not just this year but every year. If the upfront cost is more than you can handle, you can apply for LIHEAP assistance with that too.

Amy Livingston
Amy Livingston is a freelance writer who can actually answer yes to the question, "And from that you make a living?" She has written about personal finance and shopping strategies for a variety of publications, including ConsumerSearch.com, ShopSmart.com, and the Dollar Stretcher newsletter. She also maintains a personal blog, Ecofrugal Living, on ways to save money and live green at the same time.

What Do You Want To Do
With Your Money?

Make
Money

Explore

Manage
Money

Explore

Save
Money

Explore

Borrow
Money

Explore

Protect
Money

Explore

Invest
Money

Explore