The COVID-19 crisis continues to have an unprecedented effect on the American economy and the well-being of families. On March 27, the President signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2.2 trillion spending program to help mitigate the effects of the pandemic. The bill included $900 million for the Low Income Home Energy Assistance Program (LIHEAP) to help low-income households pay their utility bills during the crisis. NEADA estimates the $900 million will help approximately three million families.
Due to the depth of the crisis, this funding only scratches the surface of what families will need to stay afloat. In the final week of March alone, 6.6 million new people filed for unemployment. The New York Times estimates the total unemployment could be upwards of 16 million before the pandemic has run its course. This is in addition to the millions of underemployed, disabled, and elderly Americans who were struggling to make ends meet before the crisis began. These families will rely on LIHEAP to help pay the bills until they get back on their feet.
State LIHEAP directors are calling for additional funding of $4.3 billion to help the millions more households that will be affected. As shown in the following table, the additional funds will allow up to reach about 11.2 million households.
We estimate additional funding will serve the following additional households:
| Supplemental Funding Level | Newly Laid-off Workers | Seniors Sheltering in Place | Current LIHEAP Customers | Total Households | Average Grant | AC Units for Elderly |
|---|---|---|---|---|---|---|
| $1.301 billion | 1,400,000 | 700,000 | 700,000 | 2,800,000 | $325 | 1,000,000 |
| $2.302 billion | 2,800,000 | 1,400,000 | 1,400,000 | 5,600,000 | $325 | 1,000,000 |
| $4.304 billion | 5,600,000 | 2,800,000 | 2,800,000 | 11,200,000 | $325 | 1,000,000 |
Note 1: Many low income elderly do not have air conditioning. In each budget scenario, $300 million will go towards the purchase and installation of air conditioning units for the elderly in addition to bill payment assistance.
Note 2: All estimates assume an administrative fee of 10% in addition to the grant.
NEADA’s estimate of need assumes an average grant of $325 to cover home energy costs for four months, plus $300 to provide window or room air conditioners for elderly and medically vulnerable households to ensure their houses stay a safe temperature while they are sheltering in place.
States have reported to us that they are ready to move funds quickly. Despite the challenges of switching from in-person applications to telephone or mail, the states are making the necessary changes to keep their programs open and continue providing service to families in need. The initial $900 million will bridge the gap, giving states the ability to keep programs running, staff employed, and customers served while a more comprehensive solution is being developed but it is not sufficient to meet the rapidly growing need for assistance.
Contacts
Mark Wolfe: 202-320-9046, mwolfe@neada.org
Cassandra Lovejoy: 202-333-5916, clovejoy@neada.org