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Thursday, October 6, 2011

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 (sometimes referred to as formula 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 FY2007, 52.8% of funds went to pay for heating assistance, 3.4% was used for cooling aid, 17.9% of funds went to crisis assistance, and 10.1% 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, after being funded under a series of continuing resolutions, Congress appropriated a total of $4.71 billion for LIHEAP regular and emergency contingency funds as part of the Department of Defense and Full-Year Continuing Appropriations Act (P.L. 112-10). Of this amount, $4.51 billion was appropriated for regular funds and $200 million for emergency contingency funds. This compares to a total appropriation of $5.1 billion in FY2010, with the same level of regular funds, but $590 million in emergency contingency funds. The FY2011 appropriation was also subject to an across-the-board rescission of 0.2%, bringing the LIHEAP total to approximately $4.7 billion. On January 24, 2011, HHS announced the distribution of $200 million in emergency contingency funds to all states, tribes, and territories.

The President’s budget for LIHEAP in FY2012 proposed to reduce regular funds to $1.98 billion, the amount that was appropriated for the program in FY2007 and FY2008, and to fund emergency contingency funds at the FY2010 level of $590 million. The Senate Appropriations Committee-passed bill for FY2012 (S. 1599) would increase LIHEAP funding over the President’s request by approximately $1 billion, but it would reduce funding from the FY2011 level by $1.1 billion. The bill would provide $3.40 billion for regular funds, all distributed according to the proportions of the “old” LIHEAP formula, and retain the same level of emergency contingency funding from FY2011—$200 million. The Departments of Labor, Health and Human Services, and Education Appropriations bill introduced in the House (H.R. 3070) would appropriate $3.93 billion for regular funds, with state distributions made according to the statutory LIHEAP formula, and would provide no emergency contingency funds.

This report describes LIHEAP funding, program rules, and eligibility.

Date of Report: September
30, 2011
Number of Pages:
Order Number: RL
Price: $29.95

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