Are $5 LIHEAP checks fueling welfare growth?
The Low Income Heating Assistance Program (LIHEAP), the state program run by the Maine State Housing Authority that helps low-income people heat their homes, is also being used as a mechanism to help qualify people for additional welfare benefits.
The welfare program tied to LIHEAP, known as the food supplement program—or “food stamps” here in Maine—is a federally funded program that provides money for food for low-income households and individuals. There are different benefit levels, depending on the net income of the recipient.
The practice at MaineHousing, according to an email from MaineHousing’s manager of program operations, is to issue five-dollar heating assistance checks to LIHEAP-eligible individuals who live in subsidized housing, where heat is often included in the subsidized rent.
According to MaineHousing, “the reason for the $5 check is that another federal program, The Food Supplement Program, provides a higher benefit to LIHEAP recipients.” By getting a LIHEAP check, recipients can write off $644 as “utility expense,” thereby lowering their income and increasing the awarded benefit.
Officials at MaineHousing confirmed the practice. “Federal regulations tie the LIHEAP benefit to the Food Supplement Program. The benefit is paid once every five years,” officials said. They estimate that 1,400 of the $5 checks will be sent out this year. In the past, one-dollar checks had been sent each year; now recipients must receive and cash a check just once every five years to stay on the list of LIHEAP recipients that qualifies them to potentially receive higher food stamp benefits.
To calculate whether a household is eligible for food stamp benefits and what level of benefits they will receive, certain expenses are allowed as a deduction. Potential recipients are allowed to deduct heating, cooling and other utility costs.
One of these deductions is the “Full Standard Utility Allowance,” or FSUA, which is a deduction for “households that incur expenses for heating or air-conditioning bills that are separate and apart from rent/mortgage bills,” according to Maine Food Supplement Program Certification manual. As of October 2011, the FSUA deduction stood at $644, an amount that is adjusted periodically by government to reflect utility costs.
The $644 FSUA deduction is available directly to anyone who receives LIHEAP money, thus the $5 checks from MaineHousing. The DHHS food stamps manual states: “Assistance from HEAP or ECIP automatically entitles the household to the FSUA.” The FSUA helps recipients qualify for more benefits, because their net income is lower as a result of the additional $644 “expense.”
So what happens in the case of someone in subsidized housing where utilities are already covered as part of the Section 8 benefit? As long as they get that $5 LIHEAP check, they still automatically qualify for the $644 FSUA deduction and the potentially higher food stamp benefits.
The strategy has been pushed by groups such as the Food Research and Action Center, which put out a 2009 publication titled “Heat and Eat: Using Federal Nutrition Programs to Soften Low-Income Households’ Food/Fuel Dilemma.” In the publication, the group uses Maine as an example.
“States like Maine have encouraged their state LIHEAP agencies to provide a nominal cash LIHEAP benefit (such as one dollar annually) directly to Food Stamp households whose not otherwise calculated with the heating/cooling SUA in the shelter deduction,” according to “Heat and Eat.” “This special LIHEAP benefit simplifies the shelter calculation and significantly increases Food Stamp benefits for thousands of households.”
The strategy to get a higher benefit for recipients seems to be working. The food stamp program in Maine has grown rapidly in the past few years. In 2007, there were 162,600 people in Maine participating in the food stamp program. As of March 2012, the program had enrolled an additional 88,200 participants, increasing total enrollment to 250,865 individuals.
There has been growth in the total amount of benefits awarded in the program as well—and at an even more rapid clip. In 2007, Maine participants in the food stamps program received a total of $170.5 million in benefits, and that number more than doubled in 2011, with benefits totaling $382 million, according to the United States Department of Agriculture.
There is at least one group in Maine that touts LIHEAP as a way to get increased food stamp benefits. Maine Equal Justice Partners, a progressive advocacy and lobbying group, states on their website in a Q & A about the food supplement program that, “even if you get only $1.00 of Fuel Assistance (LIHEAP) you will likely get a lot more in Food Supplements. Also, by getting Fuel Assistance it will make it easier for you to apply for Food Supplements. So when in doubt, apply for Fuel Assistance.”
The food supplement program director at DHHS confirmed the link between LIHEAP and food stamps, noting that it was federal regulation that mandated that connection in figuring benefits. The director said that they simply get a list of LIHEAP recipients and use that to calculate benefits. She was unaware of any official program to distribute $5 checks to ensure people receive higher food stamp benefits.
MaineHousing officials said that at some point in the past, they suspended the practice of sending a “minimum LIHEAP benefit” because it cost money to administer that practice. Communications Director Peter Merrill said at the time he “got his hat handed to him” by the Legislature, who he said forced MaineHousing to re-institute the practice of sending checks. Merrill said they went to the $5 check every five years, instead of the $1 check every year, because it saved money to do it that way.
The “hat handing” Merrill referred to could be a law passed in 1995, during Angus King’s first year as governor. It specifies that Maine must take significant steps to ensure food stamp recipients get the Full Standard Utility Allowance, including seeking a waiver from the feds, if necessary, that would allow Maine to “continue to use the food stamp standard utility allowance in determining the amount of food stamp benefits available to households that previously qualified for that allowance solely by reason of receipt of LIHEAP benefits.”
After federal welfare reform in 1996 successfully reduced the number of people participating in the food stamps program, Maine became a leader in finding a way to circumvent those reforms.
In 1998, the “LIHEAP Networker” reported that Maine was as a pioneer in solving the “problem” of reduced welfare rolls;
“Welfare reform has reduced Food Stamp eligibility for several types of households and the resulting reductions in caseloads have impacted other programs’ enrollments.” The publication reported that, “A few states have dealt with the problem by giving a minimum LIHEAP benefit to certain households who would otherwise not qualify for Food Stamps or would receive a smaller benefit.”
The report adds, “New York may follow Maine’s example and provide a nominal LIHEAP benefit to certain households that would otherwise lose Food Stamp benefits.” According to the California Food Policy Advocates, Maine’s leadership has been successful. CFPA says that, “Massachusetts, Vermont, Maine, Washington, New York, Rhode Island, Oregon, and Wisconsin have implemented a utility assistance or Heat and Eat initiative” to ensure maximum food stamp benefits.
According to DHHS officials, how this practice affects individual benefits could only be known on a case-by-case basis.
While there are still questions about how the practice originated and whether it’s “gaming the system” or not, one thing is clear. Maine led the way in figuring out how to maximize welfare benefits, and the growth in those programs shows it’s working.