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Monday, November 22, 2010

The Low Income Home Energy Assistance Program (LIHEAP): Program and Funding

Libby Perl
Specialist in Housing Policy

The Low Income Home Energy Assistance program (LIHEAP), established in 1981 as part of the Omnibus Budget Reconciliation Act (P.L. 97-35), is a block grant program under which the federal government makes annual grants to states, tribes, and territories to operate home energy assistance programs for low-income households. The LIHEAP statute authorizes two types of funds: regular funds, which are allocated to all states using a statutory formula, and emergency contingency funds, which are allocated to one or more states at the discretion of the Administration in cases of emergency as defined by the LIHEAP statute.

States may use LIHEAP funds to help households pay for heating and cooling costs, for crisis assistance, weatherization assistance, and services (such as counseling) to reduce the need for energy assistance. According to the most recent data available from the Department of Health and Human Services (HHS), in FY2006, 49.6% of funds went to pay for heating assistance, 3.6% of funds was used for cooling aid, 17.8% of funds went to crisis assistance, and 10.0% was used for weatherization. The LIHEAP statute establishes federal eligibility for households with incomes at or below 150% of poverty or 60% of state median income, whichever is higher, although states may set lower limits. However, in both the FY2009 and FY2010 appropriations acts, Congress gave states the authority to raise their LIHEAP eligibility standards to 75% of state median income. In FY2008, the most recent year for which HHS data are available, an estimated 33.5 million households were eligible for LIHEAP under the federal statutory guidelines. According to HHS, 5.4 million households received heating or winter crisis assistance and approximately 600,000 households received cooling assistance that same year.

For FY2011, the Senate Appropriations Committee reported the FY2011 Departments of Labor, Health and Human Services, and Education (LHE) appropriations bill (S. 3686) on August 2, 2010. The bill would provide $3.3 billion for LIHEAP. Of this amount, approximately $2.7 billion would be distributed as formula grants and $590 million as emergency contingency funds. The formula grants would be divided between “old” formula ($2.2 billion) and “new” formula ($505 million). The House LHE Subcommittee would provide a total of $5.1 billion for FY2011, although the division of funding between formula grants and emergency contingency funds is not specified. As of the date of this report, LIHEAP is funded under the FY2011 Continuing Resolution (P.L. 111-242) at the FY2010 level ($4.5 billion in formula grants). However, because S. 3686 would provide less funding for LIHEAP than in FY2010, states have received first quarter allocations based on the $2.7 billion level.

In FY2010, Congress appropriated $5.1 billion for LIHEAP (P.L. 111-117), the same amount that was appropriated in FY2009. Of this amount, approximately $4.5 billion was appropriated as regular funds and $590 million as emergency contingency funds. The FY2010 appropriation also maintained the distribution of regular funds set out in the FY2009 appropriations act, with approximately $840 million allocated according to the “new” LIHEAP formula and the remainder—approximately $3.67 billion—distributed according to the proportions of the “old” formula. Three distributions of emergency contingency funds were made during FY2010—see Table A-1.

This report describes LIHEAP funding, current issues, legislation, program rules, and eligibility.

Date of Report: November 8, 2010
Number of Pages: 28
Order Number: RL31865
Price: $29.95

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