The LIHEAP program is administered by the U.S. Department of Health and Human Services (HHS) and stands for low-income Home Energy Assistance Program [i]. The program assists low-income households that pay a high proportion of household income for home energy. Home energy is defined as a source of heating or cooling for a residential dwelling. The program distributes block grants to states that, in turn, pass the assistance on to individuals and families. The formula for the block grants is based on state weather and low-income population.
Each state administers the program under its own rules and guidelines within federal regulations. To qualify for the program, household incomes must not exceed 150% of the poverty threshold or 60% of the state median income. The block grants are generally allocated on a first-come, first-served basis at the state level. Not everyone who qualifies receives benefits. The program spent $7.2 billion in fiscal year 2022 and $5.9 billion in 2023 [ii].
About 5.1 million households will receive aid for heating costs in the fiscal year 2023. This compares with about 7.4 million families in poverty in 2022 [iii].
Improper Payments and Fraud
See Welfare Fraud Page.
LIHEAP Program History
The following history of LIHEAP was adapted from the Congressional Research Service [iv].
LIHEAP funds are allocated to the states according to a formula that has a long and complicated history. In 1980, Congress created the predecessor program to LIHEAP, the Low-Income Energy Assistance Program (LIEAP). Because Congress was particularly concerned with the high costs of heating (as opposed to cooling), funds under LIEAP were distributed according to a multi-step formula that benefitted cold-weather states. Later, in 1980, Congress further amended the LIEAP formula in a continuing resolution but did nothing to change the emphasis on heating expenditures in cold-weather states. Congress enacted LIHEAP in 1981, replacing LIEAP, and specified that states would continue to receive the same percentage of regular funds that they did under the LIEAP formula.
When Congress reauthorized LIHEAP in 1984, it changed the program’s formula by requiring more recent population and energy data and requiring that HHS consider all energy costs of low-income households (a change from the focus on heating needs of all households). The effect of these changes meant that funds would be shifted from cold-weather northeastern and Midwestern states to southern and western states. To prevent a dramatic shift of funds, Congress added two “hold-harmless” provisions to the formula. The result of these provisions is current law, a three-tiered formula, the application of which depends on the amount of regular funds that Congress appropriates.
See the Coronavirus Relief Bill Page for changes to the Program from legislation passed in 2021.
Entire Welfare System
LIHEAP is one of thirteen welfare programs. See how it fits in the entire system on the Welfare Programs Page.
LIHEAP Program Expenditures Over the Years
The graph above shows LIHEAP expenditures per year adjusted for the impacts of inflation (stated in 2022 dollars) [v].
[i] For a description of the LIHEAP program and related data, see U.S. Department of Health and Human Services, Administration for Children and Families, LIHEAP Fact Sheet. [Internet]. Retrieved July 19, 2024. Available here.
[ii] USGovernmentSpending.com [Internet]. Total for Low Income Home Energy Assistance. Retrieved March 15, 2024. Available here.
[iii] See Poverty Statistics Page.
[iv] Congressional Research Service. The LIHEAP Formula: Legislative History and Current Law. February 14, 2012. Available here.
[v] Data from USGovernmentSpending.com [Internet]. See methodology of inflation adjustment on the web page, Poverty and Spending Over the Years.