Connecting Households to Assistance Programs and Financial Support for Utility Bills
Paying for basic utilities is a struggle many American households experience and the pandemic has only exacerbated the situation. Failing to pay monthly bills on time can lead to a cycle of financial hardship, penalties and other financial issues making it challenging to get back on track. While there are a number of assistance programs to address this widespread problem, it’s also important for consumers to know how to manage their finances during difficult times.
Addressing the Struggle of Paying Utility Bills
Americans struggling to pay their monthly household bills was already a widespread problem pre-pandemic. However, the pandemic created job loss and supply chain disruptions, which only worsened the situation. Today, households have trouble paying for bills because of income loss, improper financial management or inflation rates and prices.
30% of households struggle to pay their bills
Experiencing financial hardships or challenges paying bills isn’t limited to low-income individuals. 30% of U.S. households experience trouble paying their bills, which includes individuals with stable income.
Electricity rates average 14.12 cents per kilowatt-hour
Between November 2020 and November 2021, the cost of electricity in cents per kilowatt-hour rose from 13.31 cents to 14.12 cents for residential. While it looks minimal, this makes the overall cost of electricity more expensive for the average consumer.
Compared to 2019, grocery store food prices increased 3.5% in 2020
In 2020, food prices were 3.5% higher than in 2019. The primary cause of this was the shift in consumption patterns and disruption of supply chains caused by the COVID-19 pandemic.
What Will Happen if Household Bills Are Not Paid?
From penalties and interest to an update on your credit report, failing to pay for household bills can result in a number of financial consequences both short- and long-term. While a one-time occurrence can be balanced out by your next paycheck, missing out on several due dates can lead to more serious consequences.
Penalties or late fees
Utility companies can add a penalty or late fee on a missed due date, which can eventually snowball into a much larger debt due after a few months of continuously failing to pay.
Loss of service
If you continuously fail to pay for your utility bills, such as gas, water or electric, the company will eventually shut off the service.
If your service is terminated, the company may require a reconnection fee. This may be difficult to account for if you’re already in a tight financial spot.
Depending on the utility, some companies may ask for a reestablishment deposit to guarantee some form of payment in the future should you fail to pay your bill again.
Credit score decreases
While utility companies don’t often report your payment history, they do report delinquent accounts missing several payments. This can hurt your credit score.
Actions to Take If You Can’t Afford Your Bills
Some months can be tougher financially than others. This can make it difficult to meet your monthly obligations. One potential effective solution is to create a short-term plan for paying your bills. This may be necessary if you are living paycheck-to-paycheck or don't have enough funds to cover your expenses. The steps below can help you get started.
Negotiate with your utility provider
Highlight the bills that are past due, late or need you to contact the provider for an extension. Believe it or not, simply contacting your provider and asking them for an extension, a payment plan or a discount may be effective.
Have due dates moved
If your provider cannot offer a discount, you can inquire about moving your due dates to a better time in the month, such as right after you’ve received your paycheck.
Be honest with your provider
Alternatively, if you know you can’t afford a bill that month, be honest. You can tell them you’re experiencing financial hardships and that you won’t have enough funds to cover the service. From here, together you can create a payment plan.
Look for assistance programs
There are many programs that offer financial assistance to low-income individuals, especially seniors or those with families. Find a program in your state that you’re eligible for and apply to receive assistance, whether it’s in the form cash or energy conservation services.
Types of Bills You Can Find Assistance For
The cost of bills can vary based on a number of factors, such as where you live, the local climate, usage habits, the size of your home and more. Regardless, you can receive financial assistance from various programs if you are eligible. Learn more about the types of bills you can get assistance for below.
Utility bills are often paid once a month and include electric, natural gas and water. It can also include trash, recycling and sewage bills. These types of bills are often non-negotiable and you may experience significant difficulty surviving without these services. Additionally, costs associated with utility bills are based on your usage of the service, such as your usage of electricity or water.
Your electric bill states how much electricity you’ve used for the month multiplied by its rate. On average, electric bills in the U.S. cost $117.46 per month in 2020, with residential electricity costing $13.15 per kilowatt hour (kWh).
Gas bills cover how much natural gas you’ve used to heat your space. The typical gas bill in the U.S. costs $667 per year.
Water and sewage bills
Water and sewage bills are determined by the size of your incoming water supply pipe and the demand for the service. Americans use an average of 82 gallons of water per day at home. However, water bills have risen by at least 27% between 2010 and 2018, making it unaffordable now for most families.
Trash and recycling bills
The average American tosses 4.9 pounds worth of trash everyday. Local trash collection or waste management providers rates are based on where you live, the size of your waste receptacle and even the items you are throwing out.
Phone and Internet Bills
Over the past decade, phones and the internet have become daily necessities. This is due to needing immediate access to information and services, such as job listings, authorities, medical services and more. Since this is an essential and necessary service, these bills can be covered by financial assistance programs.
Phones play a big role in our lives. This is why 30% of smartphone users worry often (11%) or some (18%) about paying their phone bills. Your phone bill covers calls you make and receive, voicemail, internet access and more.
Americans pay an average of $61.46 per month for their internet service. This typically covers your wireless connection and a specified amount of gigabytes (GB) you can consume monthly.
Sometimes, paying for your home can be a struggle — be it rent, repairs or efficiency upgrades. This is why there are many affordable housing and assistance programs that can help. Not only can they assist with bills, they can also be very helpful for houses destroyed by disasters or houses that need improvements.
Post-disaster home renovations can be extremely expensive, especially if you’re not prepared or don’t have homeowners insurance. Repairs alone can cost an average of $2,920. This is why there are several programs available to help low-income families cover these types of home repair costs.
Weatherizing your home can help you save on energy costs and improve the comfort of your living space. The median savings of a weatherized home is $283 in annual home energy costs.
Outside of utility, phone and internet and housing bills, there are other financial obligations that can be challenging to pay for each month. This includes food and healthcare bills.
Health insurance creates affordable medical coverage for incidents such as sickness, disease, accidents, surgeries and more. The average working-age individual spends around $7,153 per year on healthcare, which is why it’s important to think of this as a bill in your budget. However, not everyone can afford healthcare insurance, which is why there is Medicaid and other programs available.
Getting Help Paying Bills: Resources for Utility Assistance
Not being able to pay for utilities is a widespread problem in the U.S. A Pew Research Center survey found that 53% of lower-income adults have trouble paying some of their bills on a monthly basis. Fortunately, there are a number of financial relief programs that can help individuals pay for their monthly needs.
There are a number of state or local nonprofit assistance programs that can help with paying for your rent, utilities and more. While programs can vary from state to state, it’s important to do your research and find local organizations that can help with your specific needs.
To get help with utility bills, find local energy assistance providers using the map below and get in contact with your respective agency to see how you can apply for LIHEAP.
Click or tap on the states to view the local resources.
Federal Assistance Programs
There are federal assistance programs that can help with utility bills. Such programs often offer energy conservation services, energy efficiency grants or cash assistance to low-income households.
Low Income Home Energy Assistance Program (LIHEAP)
The Low Income Home Energy Assistance Program (LIHEAP) provides cash grants to help low-income families pay for their heating bills. A crisis grant is also available to households experiencing an immediate threat of losing heat.
LIHEAP is meant for low-income households that need help with heating and cooling energy costs, bill payment assistance, energy crisis assistance, weatherization and energy-related home repairs.
Benefits and How It Works
There are two types of benefits under the LIHEAP program: regular or cash benefits and emergency or crisis benefits.
- Regular benefits: These benefits are applied for every year, have a longer approval process and are given in larger amounts.
- Emergency benefits: These loans are meant for those who may have their utilities shut off at any moment, who are running low on fuel or have been impacted by a natural disaster. The approval or rejection of these applications usually takes no more than 48 hours.
One-time cash grants are paid directly to the utility company/fuel provider and credited to your utility bill. The grants range from $500 to $1,500 depending on the size, income and type of fuel used by the household.
Who can apply for this program, and how?
If you wish to apply for LIHEAP, you must be a resident of the state in which you apply and you must have difficulty paying your home energy bills. Additionally, you are automatically eligible for weatherization services if you receive Supplemental Security Income or Aid to Families with Dependent Children.
Your total household income before taxes must also fall below a certain threshold, depending on the number of people in your household. For households with more than eight people, an additional $6,810 per person applies. Find a breakdown of household sizes and maximum income levels below:
- 1 person: Maximum income level of $19,320 per year
- 2 people: Maximum income level of $26,130 per year
- 3 people: Maximum income level of $32,940 per year
- 4 people: Maximum income level of $39,750 per year
- 5 people: Maximum income level of $46,560 per year
- 6 people: Maximum income level of $53,370 per year
- 7 people: Maximum income level of $60,180 per year
- 8 people: Maximum income level of $66,990 per year
To apply for LIHEAP, contact your state or tribal LIHEAP office.
Weatherization Assistance Program for Low-Income Persons
The Weatherization Assistance Program (WAP) for Low-Income Persons is meant to help low-income families make energy efficient upgrades to their homes and reduce their energy bills. It is the nation’s largest “whole-house” energy efficiency program, providing funding to all 50 states, the District of Columbia, Native American tribes and the five American U.S. territories (American Samoa, Guam, Northern Mariana Islands, Puerto Rico and the Virgin Islands).
By spurring economic growth and reducing environmental impacts, WAP also helps revitalize communities. For every dollar invested in the program, weatherization returns $2.78 in non-energy benefits.
Benefits and How It Works
By making their homes more energy efficient, WAP enables low-income families to lower their energy bills. Using the most advanced technologies and testing procedures available in the housing industry, the funds from this program are used to improve the energy performance of housing for families in need.
Who can apply for this program, and how?
The program is available to residents of the state in which you apply. You must also be in need of home energy expense assistance to qualify for this program. WAP is automatically available if you are receiving Supplemental Security Income or Aid to Families with Dependent Children.
Another point of eligibility is your income. Your household size and maximum income must be below the following amounts (before taxes) to qualify:
- 1 person: Maximum income level of $25,760 per year
- 2 people: Maximum income level of $34,840 per year
- 3 people: Maximum income level of $43,920 per year
- 4 people: Maximum income level of $53,000 per year
- 5 people: Maximum income level of $62,080 per year
- 6 people: Maximum income level of $71,160 per year
- 7 people: Maximum income level of $80,240 per year
- 8 people: Maximum income level of $89,320 per year
You can apply by following these steps:
- Determine your eligibility.
- Identify your local weatherization provider.
- Complete the application process (online or mail in your application).
- Prepare for your weatherization service.
Temporary Assistance for Needy Families
Programs such as Temporary Assistance for Needy Families (TANF) aid families in meeting their basic needs. Under this program, the federal government provides states and territories with financial assistance and related support services in order to assist families with children. States administer a variety of programs including child care assistance, job preparation and employment assistance.
Benefits and How It Works
Each state has its own process for how TANF is implemented. States can determine their program design, the type and amount of assistance payments, the range of other services to be provided and the rules that determine who qualifies for benefits.
Who can apply for this program and how?
This program is available only to residents of the state in which they apply and who are U.S. citizens, legal aliens or qualified aliens. Additionally, you must be unemployed or underemployed, have a low or very low income and fall under one of the following categories:
- Be pregnant
- Have a child that is 18 years old or younger
- Be 18 years of age or younger and the head of your household
To apply for the TANF program, you must find the application information from your nearest State or Tribal TANF program office.
Under the Lifeline program, low-income individuals can receive a discount on phone services in order to ensure that they have access to the opportunities and security that phone service provides, including the ability to connect with work, family and emergency services. This program is administered by the Universal Service Administrative Company (USAC).
Benefits and How It Works
The Lifeline program lowers the monthly cost of phones or internet services by getting discounts for individuals. Some individuals may even qualify for a free phone.
Who can apply for this program, and how?
To qualify for this program, you must meet one of the following:
- Have income that is 135% or less than the federal poverty guidelines.
- Participate in any of the following government programs: Head Start, Federal Public Housing Assistance, Supplemental Security Income (SSI), Supplemental Nutrition Assistance or Medicaid.
- Live on tribal land or qualify for certain tribal programs.
- Receive a federal veterans pension.
If you want to apply for the Lifeline program, you must find a company in your area that offers it, as not all companies participate. Contact the company to ask for the requirements, but expect to show your ID and proof of your eligibility.
Energy Provider and Utility Companies Assistance
Certain energy providers and utility companies offer programs outside of those that are federally-funded to aid low-income families reduce their energy bills. This can come in the form of energy-saving improvements or discounts for qualified individuals. Review several programs below or inquire about programs from your energy provider.
Energy Savings Assistance Program - Pacific Gas & Electric
The Energy Savings Assistance (ESA) program from Pacific Gas & Electric involves a lot of energy-saving measures, such as replacing your refrigerator, repairing or replacing your furnace or water heater, weatherproofing and more.
To apply, your income must meet the same guidelines for the California Alternate Rates for Energy (CARE) Program. Applications for the ESA program can be sent through PG&E’s online platform and an energy specialist will contact you and set up a home assessment after reviewing your application.
Energy Affordability Program (Low Income Discount) - Consolidated Edison
Consolidated Edison offers discounts on monthly energy bills for individuals who receive benefits from certain government assistance programs. These programs include the Home Energy Assistance Program (HEAP), Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), Direct Vendor or Utility Guarantee, TANF and Safety Net Assistance (SNA).
Consumers who receive benefits from such governmental programs will automatically be enrolled and receive a letter confirming benefits. You can also check your online account with Consolidated Edison to see if you’ve been enrolled.
Energy Assistance Program (EAP) - Omaha Public Power District
The Omaha Public Power District offers utility bill assistance for qualified individuals experiencing an acute financial crisis due a verifiable emergency. They offer a maximum of $500 in assistance per year.
To apply, consumers can either contact a partner agency, contact OPPD by phone or apply online. Note that to qualify, consumers must be an OPPD customer, have a gross income below 200% of the Federal Poverty Level Guidelines and be experiencing a verifiable emergency, such as illness, death, employment lay-off or loss of income.
Community and Nonprofit Organization Assistance
There are a number of nonprofit or charitable organizations that provide families and individuals with direct financial assistance for utilities and other necessary obligations. As availability depends on the state, it’s best to search for nonprofit organizations in your area and inquire about their specific programs and requirements.
Operation Round Up
The Operation Round Up® program is a charitable initiative offered by electric cooperatives. It provides financial assistance to charitable activities and community projects by rounding up the electric bills of members to the nearest dollar. Interested individuals must complete an application form and submit it to their Operation Round Up board.
Critical Financial Assistance
Operation Homefront’s Critical Financial Assistance program is meant for active duty, deployed or veteran military members and their families. They offer financial assistance for overdue bills, repairs and other critical family needs as long as you meet their qualifying criteria. The application process involves an initial processing period, a review of your application and finally, a thorough evaluation of your account. Interested individuals must apply through their website online.
Created by a Philadelphia businessman who wants to remain anonymous, Netwish is not your traditional nonprofit. It was founded to assist those in need. The organization offers emergency cash grants and free money to qualified individuals in order to help them pay critical bills. Families with children and the elderly are given priority. To apply, simply visit their website and post on their guest book with your story.
Struggling to afford basic needs is a common problem among Americans. It’s important to know there are several key assistance programs that can help with your utilities and other household bills.
Emergency Rental Assistance Program
The Department of Treasury offers the Emergency Rental Assistance (ERA) Program, which provides economic relief to low and moderate-income households. It can help pay for rental arrears, ongoing rent and food or heating assistance. The application process varies from state to state, as local governments are responsible for their respective policies and procedures. Contact your local ERA program to see the application requirements.
Homeowner Assistance Fund
If you are a homeowner facing financial difficulties, the Homeowner Assistance Fund (HAF) may be able to help. This program was developed to prevent mortgage delinquencies, defaults, foreclosures, losses of utilities and displacement of homeowners experiencing financial hardship.
For homeowners to qualify, their income must be less than 150% of the area's median income and be going through a financial hardship, such as a job loss or high medical expenses. The application process depends on the state, which is why interested individuals must contact their local HAF program to apply. You can also use the Community Associations Institute’s map feature to see if your state is participating in HAF.
Affordable Connectivity Program
The Federal Communication Commission put up the Affordable Connectivity Program (ACP) to help low-income households get a temporary discount on monthly internet bills. This grants them a discount of $30 per month towards their broadband service, $75 for those in qualifying tribal lands and a one-time discount of up to $100 to purchase a laptop, desktop or tablet.
Qualifications depend on your household income, if you or your dependent participate in certain government assistance programs or if you already receive a Lifeline benefit. To apply, you must reach out to your internet company.
Saving Money On Utilities and Taking Control of Your Finances
Living on a low income can make paying your bills on time — or at all — a challenge. However, learning how to manage your finances and budget for your needs is an essential skill. Falling behind on payments can lead you to a cycle of debt and affect your financial future. Review how to save money on utilities and effectively maintain your finances in the long-term.
List and prioritize your expenses
Get organized and create a list of all your necessary expenses. Prioritize it according to importance, deadlines and your needs.
Check your bills regularly
Errors can happen. Ensure you’re paying only what you owe and that you aren’t being overcharged by accident by reviewing your bills regularly. If you do find a discrepancy, contact your provider right away.
Negotiate with your providers
It’s possible to negotiate with your provider on ways to get your account in good standing. This can be through a payment plan, a discount or even applying for any assistance programs they might have.
Apply for assistance programs
Research financial assistance programs in your area that you may qualify for. A good place to start is by reviewing the federal government programs in this guide, as most states have those programs.
Expert Insight on How to Pay Bills During Tough Financial Times
Managing your finances and paying your bills on time can be a struggle if you’re a low-income earner. MoneyGeek reached out to several industry leaders for their advice and insights on how consumers can pay their bills during tough financial times.
- What steps can consumers take when they’re struggling to pay their bills during a tough financial time?
- What is the best advice you can give to consumers with low-income on how they can better manage their finances?
Assistant Professor of Environmental Policy at the School of Environmental Sustainability at Loyola University Chicago
CEO and Founder of Noel Taylor Agency Financial Services
Vice President and Director of Finance & Accounting at Cover Genius
Senior Associate at Homrich Berg
Resources for Financial Assistance Programs
If you’re struggling financially, there are many resources available that can guide you — be it federal, state or local. Review the resources below to help you learn more about financial solutions and find available assistance programs in your area.
- Benefits.gov's Financial Assistance Programs: To find financial assistance programs in your area, Benefits.gov provides a helpful directory for federal and state programs. This includes tax assistance, living assistance, insurance assistance and loan repayment assistance.
- Benefits.gov's Food and Nutrition Programs: There are many food assistance programs across the U.S. Benefits.gov’s directory of food and nutrition programs on both a federal and state level can help you find one in your area that suits your needs and situation.
- Benefits.gov's Housing and Public Utilities Programs: Benefits.gov’s directory for housing and public utilities programs lets you find housing loans, insurance and energy assistance in your state.
- Eldercare Locator: Specifically made for seniors, if you’re looking for housing, insurance and benefits, health or transportation issues, the Eldercare Locator can assist you. It is a database of local services maintained by the Administration for Community Living.
- Feeding America's Find Your Local Food Bank Tool: More than 200 food banks throughout the country are part of the Feeding America network. You can use the search tool to find the Feeding America food bank nearest you.
- Food and Nutrition Service's Supplemental Nutrition Assistance Program (SNAP): Learn about SNAP and how it can help supplement the food budget of needy families and encourage them to purchase healthy food.
- HomelessShelterDirectory.org: The Homeless Shelters Directory is a valuable resource if you are homeless or experiencing housing insecurity. There are shelters throughout the country for families, individuals and mothers and their children trying to flee domestic violence.
- National Association of Free & Charitable Clinics (NAFC): With over 1,200 clinics out there in the U.S., people are able to receive affordable health care, including dental care and vision care through NAFC. Use their tool to find a clinic near you.
- Supplemental Security Income Program: Learn about Supplemental Security Income (SSI) and how it can help provide cash to meet basic needs for food, clothing and shelter.
- University of Iowa Health Care: The University of Iowa Health Care provides a list of general financial resources both federal and state that can aid families and individuals with different needs.
- USA.gov: To find federal and state benefits, grants or loan opportunities, USA.gov has a helpful rundown of the most common programs that can help with food, housing, health care and other basic living expenses.
About the Author
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