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Home Energy Bill Obligation / Housing Type

State Policies - Examples of Home Energy Obligation and Housing Type

Table - Subsidized and Rental Household Eligibility and Benefits

Publication - Subsidized Housing and LIHEAP

In order to be eligible for LIHEAP, most states require that an applicant household prove it has an obligation or responsibility to pay its home energy bill, sometimes referred to as having an energy burden. Such obligation is reflected through an active account with a utility or fuel vendor, a current energy bill, and evidence that the household pays the vendor directly.

Most states equate this obligation to the household's "vulnerability" to increasing home energy costs, and they consider households that are vulnerable to such costs, especially those that pay their vendors directly, as eligible for LIHEAP.

On the other hand, households with no home energy bill obligation are considered not vulnerable to home energy cost increases and, therefore, ineligible for LIHEAP. Or they may be considered less vulnerable than those who pay for energy bills directly.

Whether a household has a home energy bill responsibility is often directly linked to its living arrangement or type of housing. Therefore, in determining whether an applicant household has an energy bill obligation, states may ask these questions on their LIHEAP applications:

  • Does the household reside in institutional, educational housing, or other types of housing (see list below and specific state examples) where it is not likely to receive a home energy bill?
  • If the household rents, are its energy costs included in the rent or are home energy bills paid separately from rent?
  • If the household rents, are rent or utility bills subsidized through a federal or state subsidized housing program? (See below: Subsidized Housing.)

In general, states consider households in any of the above housing situations either not vulnerable or less vulnerable than those who pay their home energy bills directly to their energy vendor.

According to reviews of state LIHEAP plans by the LIHEAP Clearinghouse, states have deemed as ineligible persons living in any of the following types of housing (this list is not inclusive):

  • Licensed medical facility (hospital, skilled nursing facility, or intermediate care facility)
  • Publicly-operated community residence (example: YMCA)
  • Publicly-operated or state-certified private, nonprofit residential drug or alcoholic treatment facilities
  • Private, nonprofit residential drug or alcoholic treatment facilities
  • Government-provided housing on military bases
  • Religious and fraternal homes
  • Dormitories
  • Correctional facilities
  • Non-traditional dwellings or structures not affixed to a permanent physical address, such as tents, lean-to's, cars, vans, or buses

Subsidized Housing

States generally handle renters, whether they live in subsidized or non-subsidized housing, differently than those in the types of housing listed above. This is partly due to federal law.

Under Assurance 8, grantees must treat owners and renters equitably. According to Division of Energy Assistance guidance:

"In this section of the law, 'equitably' does not necessarily mean 'equally.' The description in your plan may tell HHS that renters and owners will be treated equally or differently. The problem will be to deal with every household so that the effect of LIHEAP is equitable for all of them. Equitable means fair, given all of the factors that come into play.... One important thing to consider is how responsible the household is for payment of its own energy bills? Is the household vulnerable to or responsible for the cost of heating and cooling?"

Another federal law governs how states must handle subsidized housing renters who receive a utility allowance to help pay their energy bills.

This law (Section 927 of the Housing and Community Development Reauthorization Act of 1992) says that subsidized housing households that pay energy bills directly to their energy vendor and who receive federal assistance through utility allowances cannot be excluded from LIHEAP. However, in determining the household's benefit, a state may take into account the amount of the energy allowance provided to the household and reduce the LIHEAP benefit accordingly.

As a result of these laws, most states have separate eligibility and benefit payment policies pertaining to renters. For example, they may take into account whether the renter is subsidized or not, and, in the case of the latter, whether its energy costs are included in the rent.

States' FY 2015 policies pertaining to rental and subsidized households are detailed here and can be summarized as follows:

  1. Many states (at least 26) deny LIHEAP eligibility to subsidized housing residents whose energy costs are included in their rent. Several others allow eligibility to these households if the tenants' rental costs are not a fixed low percentage of their income and/or are greater than 30 percent of their income.
  2. Most states consider non-subsidized renters with energy costs in their rent as eligible, although their benefits may be reduced.
  3. Subsidized rental households who pay directly for energy are treated in one of three ways:

    a) their utility allowance (if any) is taken into account in determining benefits; the benefit is reduced either by a flat amount, or by subtracting the amount of the heating or cooling portion of the allowance from the LIHEAP benefit or from the applicant's energy costs;
    b) they are given a reduced or lowest percentage of the regular (highest) benefit; or,
    c) they are treated the same as other households who pay energy costs directly, i.e., benefits are determined from the same matrix, or based upon similar criteria. Several of these states have "renter," "multi-family/single-family" or "attached/detached dwelling" benefit categories, with renter, multi-family, or attached housing applicants receiving a lower benefit. A couple of states require that these renters have rental expenses greater than 30 percent of their income.

  4. Several states give a reduced benefit to all subsidized housing clients, regardless of how energy costs are paid;
  5. Several states make no distinction between subsidized and non-subsidized renters. Benefits may be based on actual costs, or in the case of renters with energy costs included, a back-up matrix based on average statewide costs. Several of these states also have a "renter" or "multi-family/single-family" benefit category, with "renter" or "multi-family" receiving a lower benefit.

For specific examples of state policies related to energy obligation and housing types click here.

More background on subsidized housing and LIHEAP is available here.

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