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Monday, November 25, 2013

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 program through 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 or block grant 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 low-income 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 FY2008, 53% of funds went to pay for heating assistance, 3% was used for cooling aid, 19% of funds went to crisis assistance, and 10% 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. In FY2009, the most recent year for which HHS data are available, an estimated 35 million households were eligible for LIHEAP under the federal statutory guidelines. According to HHS, 7.4 million households received heating or winter crisis assistance and approximately 900,000 households received cooling assistance in that year.

In FY2013, LIHEAP received $3.255 billion in regular funds. The amount appropriated for LIHEAP as part of the Consolidated and Further Continuing Appropriations Act (P.L. 113-6) started at $3.472 billion (the same level appropriated in FY2012), but the total was reduced to $3.255 billion due to sequestration and transfer of funds within HHS. See Table B-2 for the amounts distributed to the states, tribes, and territories in FY2013.

As of the date of this report, FY2014 LIHEAP funding is set at FY2013 levels as part of the FY2014 Continuing Appropriations Act (P.L. 113-46). The amount available for the program— about $3.290 billion—is slightly higher than the FY2013 level due to about $35 million that HHS transferred to other accounts within the agency in FY2013. On November 4, 2013, HHS announced that 90% of funds available to grantees under the FY2014 Continuing Resolution (CR) would be distributed (see Table B-1).

Prior to enactment of the FY2014 CR, the President proposed a total of $3.020 billion for LIHEAP. Of this amount, $2.820 billion would have been distributed as regular funds, $150 million for emergency contingency funds, and $50 million for a new competitive grant program that would help low-income households reduce their energy burdens. The Senate Appropriations Committee approved a bill (S. 1284) that would fund LIHEAP at $3.615 billion in FY2014, all distributed as regular funds.

Date of Report: November 8, 2013
Number of Pages: 43
Order Number: RL31865
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