Testimony

Statement by
Wade F. Horn, Ph.D
Asst. Secretary
Administration for Children and Families
U.S. Department of Health and Human Services


on
Low Income Home Energy Assistant Program (LIEAP)

before
The Special Committee on Aging
United States Senate

Friday, January 6, 2006

Introduction
Good afternoon, Senator Santorum. I appreciate the opportunity to appear before you today to talk about the Low Income Home Energy Assistance Program and how it provides assistance to millions of Americans in helping them meet the costs of home energy heating and cooling.

The Low Income Home Energy Assistance Program -- known as LIHEAP -- grew out of a series of emergency programs generated by the energy crises of the late 1970s. Today, it continues to help ensure that low-income families and individuals have adequate home energy through a Federal-State partnership that provides States with the flexibility they need to design the best program approaches to meet consumer needs.

As such, LIHEAP continues to fulfill its dual responsibility to provide ongoing assistance where it is most needed, and to respond to emergency situations such as extreme weather conditions, supply disruptions, price spikes and relief for crises such as Hurricane Katrina. For the past several years, almost 5 million households per year received LIHEAP assistance to help them get through the winter months. The program also provides cooling assistance to about 400,000 households, and weatherization assistance to about 90,000 more.

The receipt of a LIHEAP benefit not only means a warm home (or sometimes a cool one), but also often means the difference between a family staying in their home or having to move, with all the disruption that can entail. Indeed, having to move because there is no heat can mean loss of a job, a change in schools for children, or loss of a child care arrangement. Likewise, a LIHEAP benefit can help make it possible for the elderly to stay in their homes, for families receiving aid under the Temporary Assistance for Needy Families (TANF) program to continue to move toward self-sufficiency, and for working parents to avoid having to seek other forms of public assistance.

LIHEAP provides critical assistance to low-income households affected by energy emergencies. In Fiscal Year (FY) 2005, States received a total of $1.9 billion in LIHEAP block grant funds. Pennsylvania’s share of the block grant was $126.8 million. Pennsylvania also received an additional $18.7 million as part of the $250 million in emergency contingency funds that went to all States last winter because of high fuel prices. In September, a total of $27.25 million in contingency funds was released to Alabama, Florida, Louisiana and Mississippi to help with the home energy crisis needs of households impacted by Hurricane Katrina.

The recently enacted FY 2006 Labor/HHS Appropriations bill provides almost $2 billion for the LIHEAP block grant program and an additional $181 million for emergency contingency funds. To date, Pennsylvania has requested and received $95.1 million of their block grant funds for FY 2006.

I am pleased to announce that yesterday, we released $100 million of the emergency contingency funds made available in the budget to assist families in need pay their heating bills this winter. Pennsylvania’s share of the release was almost $7.7 million. A total of $101.5 million remains available under the contingency fund for this fiscal year.

At the current funding level, LIHEAP funds are allocated to States based almost entirely on the allocation formula percentages established in 1981 when the block grant program was created. The formula is calculated using the States’ low-income population, home energy expenditures by low-income households, and weather conditions substantially weighted towards cold weather. State and federally-recognized tribes may request direct funding from the Department of Health and Human Services, and about 140 tribes and tribal organizations do so. Smaller amounts go to the territories.

States often use local entities called community action agencies to provide direct assistance to individuals in need. States and other LIHEAP grantees have great flexibility in applying LIHEAP funds to meet local needs.

LIHEAP grantees may set their income eligibility level as low as 110 percent of the poverty level, or as high as the greater of 150 percent of the poverty level or 60 percent of the State median income. For a family of four, 110 percent of poverty to 150 percent of poverty would translate to an income of $20,735 to $28,275. For example, sixty percent of State median income for a family of four in FY 2006 ranged from $28,530 in West Virginia, to $49,444 in New Jersey. Pennsylvania set its eligibility rate for its heating assistance program at 135 percent of poverty in FY 2005 which translates into an income level of $13,920 for a household size of one to $43,726 for household size of eight.

Legislative changes in 1994 made it possible for grantees to look less at absolute income levels and more at need. In setting eligibility levels, States may, for example, give priority to households that pay a large percentage of their income for home energy or that include members who have the greatest energy need because of age or health. We encourage States to target their programs to the more vulnerable low-income individuals in their communities – households with elderly persons or young children.

In the March 2004 Census Bureau Annual Social and Economic Supplement to the Current Population Survey, data show that 35 percent of households receiving LIHEAP heating assistance had at least one person 60 years old or older; 47 percent had at least one person with a disability; and 22 percent included at least one child 5 years old or younger.

However, in 2004 the Mid-Atlantic, East North Central and West North Central areas of the country reported that the elderly were being served at a rate lower than the national level in the LIHEAP program. To address this issue, over the last two years the Administration has conducted an outreach campaign with LIHEAP brochures in English and Spanish to help inform communities about energy assistance available to low-income older Americans. So far this fiscal year, we have distributed more than 67,000 brochures to organizations across the nation, with 53 percent of the brochures targeted to community-based organizations serving the elderly in the regions of the country showing low rates of LIHEAP usage among the elderly.

In Pennsylvania, the Department of Public Welfare (DPW) works with area agencies for seniors and senior centers across the State to get the word out about LIHEAP with outreach and application materials. In FY 2004, the most recent year data are available, DPW authorized $21.8 million in regular LIHEAP heating assistance for approximately 105,000 households with an elderly member over the age of 60. This represented 31 percent of all heating payments made by the State. In addition, the State provided crisis benefits for such incidents as impending shut offs to over 23,000 elderly households, in the amount of $6.8 million, representing 20 percent of all crisis payments.

We are continually impressed by the resourcefulness of State and local agencies in using LIHEAP funds to provide meaningful help to families facing a home energy crisis. These workers on the front lines generally resolve or avert crises by telephoning the energy vendor, who maintains or restores service based on an assurance that a LIHEAP benefit will be paid. This is especially important during these cold winter months to help ensure that the elderly stay safe and healthy. We are confident that increased Federal, State and local efforts to reach the elderly in the Mid-Atlantic, East North Central and West North Central areas of the country in 2006 will increase the participation of the elderly in the LIHEAP program.

Conclusion
In conclusion, I want to assure the Committee that this Administration is committed to the Low Income Home Energy Assistance Program. We, at the Department of Health and Human Services, are working actively with our State partners to ensure that LIHEAP funds are targeted to America's most needy families, including our elderly citizens, so that they can maintain a healthy temperature in their homes.

Thank you. I would be happy to answer your questions.


Last Revised: June 6, 2006