LIHWAP IM-2021-01 Benefit Policy and Matrix Resources FY2021

Publication Date: July 21, 2021

Low Income Household Water Assistance Program

Information Memorandum

IM#:                                  LIHWAP-IM-2021-01

DATE:                               July 21, 2021

TO:                                      LIHWAP Grantees

SUBJECT:                        LIHWAP Benefit Matrix Policy Resources

ATTACHMENT(S):         N/A

The purpose of this Information Memorandum (IM) is to provide Low-Income Household Water Assistance Program (LIHWAP) grantees with guidance on establishing a Benefits Matrix Policy for the program.

For most grantees who currently administer the Low-Income Home Energy Assistance Program (LIHEAP), the concept of a benefit matrix or payment matrix is familiar. However, the initial guidance begins with a brief definition, followed by recommended practices, and sample Benefit Matrix Charts related to LIHWAP priorities.

LIHWAP Benefit Matrix Definition

For the purposes of LIHWAP, the benefit matrix is a tool, such as a chart or a point system, that outlines which LIHWAP benefit amount will be available to different households based on required factors—such as household income, household size, and household water costs/needs.

OCS Recommended Practices for a Benefit Policies

All LIHWAP grantees must establish their own written policies and procedures for intake workers to follow when deciding the benefit amount for each household. That section of the grantee’s LIHWAP Policy or Operation Manual will provide key definitions and steps that intake workers must follow when making benefit determinations. Such written policies and procedures are typically reviewed by independent monitors and auditors that check on your program’s compliance with federal rules.  The LIHWAP Policy or Operation Manual must address both equity and efficiency simultaneously. Having clear, equitable, and standard written procedures will help enable intake workers to be consistent and accurate in how they determine benefit amounts, which will help reduce the number of claims from applicants that appeal benefit determinations, also known as a fair hearing request.  All applicants are entitled to make a fair hearing request, and all LIHWAP grantees must make fair hearing requests available to applicants.

There are several important rules that a LIHWAP grantee’s benefit policies should address, including but not limited to:

  • Clearly stating whether there is a minimum and/or maximum (cap) benefit amount for which households can qualify. 
  • Listing all allowable charges, the benefit can cover (e.g., reconnection fees, late fees, interests, lien removal fees, etc.).
  • Noting timeframes for determining benefit amounts.
  • Providing a process for how to document the benefit calculation and build that into the eligibility determination software, if used.
  • Explaining procedures for notifying households of their benefit determinations and building that into the eligibility determination software, if used.
  • Outlining procedures by which applicants can appeal their benefit determination, e.g., request a “fair hearing” reconsideration.  This includes the amount as well as the timeliness of the eligibility determination process.
  • Incorporating the three priority groups that the ACF Office of Community Services (OCS) outlined during the June 24 webinar and have repeated below. While all households that qualify for LIHWAP benefits must meet income eligibility requirements outlined in the LIHWAP Terms and Conditions, a detailed benefit matrix is only a requirement for some potential services.

There are three LIHWAP household priority groups:

1) Households with Disconnected Water Services,

2) Households with Pending Disconnections of Water Services, and

3) Households Seeking Help with Current Water Bills. 

Grantees do not necessarily need a detailed benefit matrix for the first two household priority groups because LIHWAP may be used to cover the full outstanding bill for a household in order to restore water services or prevent disconnection.  However, a benefit matrix will need to be developed for the third priority group. In addition, all three priority groups will need to have established policies to serve as guidance for assistance, as described below.

Policy Considerations for Priority Groups

  • Priority Group 1: Households with Disconnected Water Services. The initial priority is to target assistance first for those households whose services are already disconnected.  Grantees may use a variety of interventions to achieve the expected outcome of restoring service.  This may include paying the entire amount past due plus all required fees or paying a portion of the outstanding balance and coordinating approval of other resources that can be used to bring the account current.  Another intervention is paying a portion of past due amount and negotiating reconnection of the service for 90 days or longer based on the LIHWAP benefit. Still another intervention might include negotiating with vendors to get the household on a budget payment plan.  There are many interventions your team can use in coordination to achieve the outcome of restored service.

  • Priority Group 2: Households with Pending Disconnection. The second priority group are the households that currently have service but are about to lose it because of nonpayment.  This means they have a disconnection notice, or they could have an outstanding balance but have been protected by a disconnection moratorium that is about to expire.  For this group, the expected outcome is to avoid a disruption of service regardless of how brief. 

  • Priority Group 3: Households Seeking Help with Current Water Bills (No Past Due Balance). The third and last priority group would be assisting households who have working service and are seeking help with current bills only, meaning they are not behind on their bills.  It is for this last group of households that you will need some sort of benefit matrix or calculation to decide how to vary the amount of assistance for each of those households.

There are several ways to assign values to the factors you chose for your benefit matrix. Two of the most common ways are a point value system and a monetary value system.

  • The point value system is based on relative costs assigned to each factor: income, number of eligible household members, water cost calculation, presence of vulnerable members, etc.  A certain number of points will need to be assigned to each category and factor.

For example:

Factor

Number of Points

One amount below:

Household Income below 30% of State Median Income (SMI) Estimates

15 points

Household Income between 31%-45% of SMI

10 points

Household Income below 46%-60% of SMI

5 points

Plus one amount below:

Household Water Burden that is 11% or more of the total household income

15 points

Household Water Burden that is between 5% - 10% of the total household income

10 points

Household Water Burden that is 5% or below of the total household income

5 points

Plus one amount from below:

1 Household Member

5 points

2-4 Household Members

10 points

5-8 Household Members

15 points

Add 5 points for each person above the 8 household count.

Add 25 points for each adult person in the household that lost a job since March 13, 2020 (without cause) and who remains unemployed.

Calculate Benefit Amount:

Total Points

Benefit Amount

15 points

$500

20-30 points

$750

31-45 points

$1,000

46 points or higher

$1,250

In the sample above, let’s say two households apply with the following factors on the applications:

  • Household A:
    • Total income:  55% SMI
    • Eligible household members:  3
    • Household water burden:  10%
    • Unemployed member:  0
    • Total Points=25 points [this included 5 points based on income, plus 10 points based on water burden, plus 10 points based on household size]
    • Total Benefit= $750 

  • Household B:
    • Total income:  45% SMI
    • Eligible household members:  9
    • Household water burden:  13%
    • Unemployed member:  2
    • Total Points=55 points [this included 10 points based on income, plus 15 points based on water burden, plus 20 points based on household size, plus 10 points for unemployed adults]
    • Total Benefit= $1,250 

  • The monetary value system is similar to the Point Value System, except that dollar amounts are assigned instead of point values.

Factor

1 Household Member

2-4 Household Members

5 or more Household Members

One amount below:

Household Income below 100% of Federal Poverty Guidelines (FPG)

$750

$1,000

$1,250

Household Income between 100%-124% of FPG

$500

$750

$1,000

Household Income below of 125%-150% FPG

$250

$500

$750

Plus one amount below:

Household Water Burden that is 11% or more of the total household income

$750

$1,000

$1,250

Household Water Burden that is between 5% - 10% of the total household income

$500

$750

$1,000

Household Water Burden that is 5% or below of the total household income

$250

$500

$750

Plus one amount below if the factor applies (select the amount based on the number of vulnerable members in the household):

Additional Amount if there is a vulnerable member (senior, young child, or disabled person):

$250

$500

$750

In the sample above, let us assume two households apply with the following factors on the applications:

  • Household A:
    • Total income:  115% FPG
    • Eligible household members:  5
    • Household water burden:  7%
    • Number of vulnerable members:  3 (three kids below six years old)
    • Total benefit= $2,500 [this included $1,000 based on income, plus $1,000 based on water burden, plus $500 for vulnerable members]

  • Household B:
    • Total income:  125% FPG
    • Eligible household members:  2
    • Household water burden:  12%
    • Number of vulnerable members:  0
    • Total benefit= $1,500 [this included $500 based on income, plus $1,000 based on water burden, plus $0 for vulnerable members]

These are simply examples you can use to explore the concept of a benefit matrix to allocate benefit amounts to help with current bills.  Just remember you may not have enough funding to serve households that only need assistance with current bills, as they fall in the third priority group.  There is no federally-required methodology to assign values as long as grantees are consistent, fair, and have a clear and equitable rationale for assigning values with higher or lower point values than others. We encourage you to analyze your benefit matrix policy and benefit matrix tool in the context of total funding available for program benefits.

Next Steps

As a first step in developing LIHWAP benefit policies including a matrix for current bill assistance, grantees are encouraged to review current benefit matrixes and policies related to LIHEAP and consider whether it is appropriate and feasible to adapt those policies for household water assistance.  While some elements of existing LIHEAP benefit matrixes will clearly differ from a water assistance program—such as household energy burden needing to be replaced with household water burden—other policies and procedures may be transferrable, such as household size and income.

Additional Questions and Contact Information

If you are a LIHWAP grantee and you have additional questions, please reach out to the LIHWAP program contact for your region. LIHWAP staff contact information can be found  here: https://www.acf.hhs.gov/ocs/contact-information/lihwap-contact-information.

For general questions, please reach out to LIHWAP@acf.hhs.gov.

Thank you for your attention to these matters. OCS looks forward to continuing to provide high-quality services to OCS grantees.

/s/
Lauren Christopher
Director, Division of Energy Assistance
Office of Community Service