Household Income

This section reviews statutory guidance and provides state practices tables pertaining to:

Income eligibility, including the most recent year's federal poverty guidelines state-by-state, can be found here

Categorical Eligibility

Assets / Resource Tests

Defining Income

Variations by Component or Household Type

Zero Income

Changing Income Guidelines

Income Eligibility:
States must set LIHEAP income eligibility standards within the maximums and minimums established by law. The LIHEAP statute {(Section 2605(b)(2)(B) or Assurance 2} says that to be eligible a household must have an income that does not exceed the greater of 150 percent of the federal poverty guideline (FPG) or 60 percent of the state median income (SMI) level. (The FPG is the baseline of 100 percent of federal poverty, adjusted each year by the federal government.) In addition, income eligibility levels may not be set below 110 percent of the FPG. The federal government establishes the FPG and SMI poverty guidelines annually and publishes updates in the Federal Register each winter.

States may adopt the year's new guidelines at any time between the date of publication in the Federal Register and the first day of the next fiscal year or by the beginning of the grantee's fiscal year, whichever is later. For LIHEAP, the majority of states use the prior year guidelines until the first day of the next fiscal year in order to avoid changing guidelines in the middle of their program year. Most states start their new fiscal year October 1; however, a few states start theirs July 1 and those states, along with several that operate summer cooling programs, adopt the most recently-published guidelines in June or July.

The FPG and SMI guidelines in effect for most states as of the beginning of FY 2014 are here:

Income Eligibility: State Practices: Within the parameters set by the statute, the LIHEAP income maximums vary among the states considerably. This table and graph show states that planned to use variations of the FPG during 2013, and those that planned to use 60 percent SMI, and how these income maximums compare to 100 and 150 percent of FPG for a household of four. (The variations are based on states' 2013 plans filed in late 2012 and some may have changed. States may change income guidelines during the middle of the year if they file a state plan amendment.) Although states can have a different poverty level for each component (crisis, cooling and weatherization), the majority use the same poverty level for all components.

As can be seen on the table, states use the flexibility allowed in the LIHEAP statute to serve households with a wide range of income levels, e.g., 18 states used the 150 percent maximum, while 11 had ranges from 110 to 150 percent, and 14 states and the District of Columbia chose to use 60 percent SMI.

Categorical / Automatic Eligibility: In addition to determining eligibility on the basis of income under the FPG or SMI guidelines as detailed above, states may define a household as "categorically" eligible, {(Section 2605(b)(2)(A)} also referred to as "automatically" eligible, if at least one person in that household receives assistance under any of the following programs: TANF, SNAP, SSI or "certain means tested veteran's programs."

As shown in this table, the 20 states that implemented the categorical eligibility option in 2013 had varying requirements of clients during LIHEAP intake:

  • Require an application but don't ask about income or proof of income
  • Require an application and proof of income from other household members
  • Consider the household income eligible, but still require it to meet the grantee's additional eligibility requirements such as residency, assets tests, or responsibility for energy bills
  • Consider the household automatically eligible and issue it an automatic payment without requiring an application
  • Add other assistance programs to their list in determining automatic/categorical eligibility, e.g., Medicare Part D, state-funded means tested programs for the blind or disabled, refugee assistance, etc.

Assets Tests:
In addition to income, states may look at household assets (also referred to as liquid assets, or resources) in determining financial eligibility for LIHEAP. The LIHEAP statute does not require assets tests or otherwise mention them; however, at least a dozen states utilized an assets test in 2013.

States that utilize assets tests cite their policies aimed at serving those households most in need. These states assume that those with cash assets, or assets that can be readily converted to cash, are less in need than those without such assets and that LIHEAP funds should go to those who don't have assets and are in greater need of LIHEAP.

Among states utilizing assets tests, variations exist, for example:

  • Allowable assets ranged from a high per household of $20,000 to a low of $2,000
  • Allowable assets may increase in proportion to household size, e.g., $5,000 for a household of 1; $7,000 for a household of 2
  • States may allow higher assets for households with elderly members
  • Amount of assets may be added to gross income and if the amount is under the annual gross income for the household size, the household is eligible

State definitions of assets vary, but they often include:

  • Cash
  • Checking and savings accounts
  • IRAs and 401ks
  • Certificates of deposit
  • Stocks and bonds
  • Property on which the applicant is not living

State exclusions from countable assets often include:

  • Household's primary residence and the property upon which it is located
  • One vehicle
  • Jointly owned resources
  • Household furnishings
  • College grants or loans
  • Burial accounts

Income Definitions:
There is no federal definition of income; as a result, states may develop their own definitions of income, as well as develop their own timeframes for counting income. In defining and counting income, states generally take into account these four factors:

  • Countable (base) income, including but not limited to, wages, salaries and tips; or means-tested benefits such as SSI, Social Security and veteran's benefits
  • Non-countable or excluded income, including but not limited to, the value of SNAP benefits or benefits from certain other federal programs, or cash income over which the household has no control.
  • Income deductions (what will be subtracted from income), such as medical expenses
  • Time period to be used for counting income

In counting income, common grantee practices include:

  • Count gross income of all household members; allow deductions or exclusions per grantee's policy. States choose to count gross income instead of net income for administrative efficiency, i.e., determining net income for each household would take more time due to consideration of a variety of potential deductions. Furthermore, the LIHEAP federal household report requires states to report household gross income.
  • Count net income only from self-employment or for Social Security income with Medicare deduction.

Regarding counting of gross income versus net income, the following guidance comes from the Division of Energy Assistance FAQs on its website:

"Generally, income means gross income, but a number of states have deductions for medical expenses over a certain level, or for some limited expenses associated with employment such as child care. If a state is going to exempt taxes or go beyond the medical and employment expense, we should look at it with the grantee before it acts.

...Using gross income is a generally accepted (though not required) practice in many programs, including the LIHEAP program. Total gross income provides a 'base' from which to evaluate a potentially eligible household in the fairest way possible, relative to other potentially eligible households. In addition, many LIHEAP grantees count the receipt of child support payments as income, and that amount is included in the income total when determining a household's income eligibility for LIHEAP benefits."

See examples from Minnesota,
Florida and Oregon on how income is counted.

Variations by component or household type: As shown in the above-referenced poverty guidelines table, most grantees utilize the same poverty guideline for all components of LIHEAP: heating assistance, cooling assistance, crisis assistance and weatherization, if applicable.

However, some grantees vary income guidelines by components, for example, several have a higher income guideline for their weatherization or crisis components than their heating assistance components. In the case of weatherization, this may be done to provide a larger pool of applicants for the weatherization agency. In the case of crisis, it may be to ensure that emergency assistance is available to more households.

Grantees may also vary income guidelines by type of household, e.g., allow a higher income maximum for households with elderly or disabled members or young children, reflecting grantees' priorities for those they consider to be more vulnerable.

Zero Income: Grantees often encounter applicants or household members claiming to have no income. In those cases, they will interview the applicant or household member and / or have them fill out a form explaining how the household is meeting current living expenses such as rent, mortgage, utilities, food, etc. They may also require the applicant to sign a notarized statement saying he/she has no income.

Examples of such forms are here:

Changing income eligibility:
Other than changing to reflect the updated federal guidelines, grantees tend to keep the same LIHEAP income eligibility levels from year to year. Reasons that they may change their guidelines include:

  • A large increase or decrease in LIHEAP funding
  • Executive or legislative decisions beyond the control of LIHEAP office
  • To align LIHEAP income levels with utility discount programs

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