LIHWAP IM-2024-02 LIHWAP Supplemental Payments FY2024

Low Income Household Water Assistance Program

Information Memorandum

IM#: ACF-OCS-LIHWAP-IM-2024-02

DATE: February 22, 2024

TO: Low Income Household Water Assistance Program (LIHWAP) Grant Recipients

SUBJECT: LIHWAP Supplemental Payments

ATTACHMENT(S): N/A

Purpose

The purpose of this Information Memorandum (IM) is to answer frequently asked questions related to providing supplemental payments to Low Income Household Water Assistance Program (LIHWAP) beneficiaries. This IM reiterates the guidance on supplemental payments that was already provided in LIHWAP IM-2023-02 LIHWAP Best Practices FY2023 and clarifies how this guidance applies to grant recipients who have a no-cost extension (NCE). This IM is only applicable to LIHWAP grant recipients who are currently operating under a NCE and have an obligation deadline of March 31, 2024 and a liquidation deadline of June 30, 2024. 

Frequently Asked Questions

1. Question: What is a supplemental payment?

Answer: Supplemental payments refer to an additional payment credited to a household that has already been deemed eligible and received a LIHWAP benefit payment. Supplemental payments can provide greater sustainability for future months. Given that LIHWAP is a temporary program, making supplemental payments to households — which often result in a credit on their water account — can help bolster families facing high water burdens. If a grant recipient has revised their policies to increase benefit amounts, or to serve those with current bills, they may want to provide previous beneficiaries with a supplement to ensure they can benefit from the expanded policies. Providing supplements can also reduce the administrative burden on local administering agencies to process additional applications.

2. Question: What benefit amount should be provided with a supplemental payment?

Answer: Supplemental payment amounts are determined by the grant recipient. Payment amounts can be based on rates charged by the water service provider, income, household size, etc. The factors involved are up to the discretion of the grant recipient and do not require approval from the Office of Community Services (OCS). 

Many grant recipients are planning to make flat rate payments to all eligible households who previously received a benefit payment, based on the remaining program funds prior to March 31, 2024. In this scenario, the remaining funds would be divided equally amongst the eligible households. 

Example

Grant Recipient A has $1,000,000 left in funding. There are 1,000 eligible households. $1,000,000 / 1,000 eligible households = $1,000 supplement per household.

 Supplemental payments may exceed the current water bill owed. If the supplement is more than the current water bill owed, the remaining funds can be applied to the household water account in the form of a credit. OCS recognizes that not all water service providers can hold a credit, and therefore some households may receive a lower supplement amount, equal to the cost of their current water bill, or may not receive a supplement at all. 

3. Question: Who is eligible; can grant recipients limit eligibility?

Answer: It is up to grant recipients to determine who is eligible for a supplement based on the grant recipients current written policies for eligibility determination and in accordance with the approved LIHWAP Implementation Plan. 

Grant recipients should develop their own prioritizations for who will receive supplemental payments. Grant recipients may want to prioritize supplements to households served by water services providers who have a written vendor agreement in place, can hold credits on accounts, or serve areas with the highest water burden. 

4. Question: How do the obligation and liquidation deadlines for LIHWAP apply to issuing supplemental payments? 

Answer: Grant recipients and subrecipients must obligate funds for supplemental payments by establishing policies and procedures and completing household eligibility determination by March 31, 2024. Households may not be identified for a supplemental payment after March 31.

Grant recipients may liquidate funds (make supplemental payments) to water service providers on behalf of eligible households throughout the liquidation period. Payments must be made no later than June 30, 2024.

5. Question: What should a grant recipient do if a portion (or all) of a supplemental payment is returned by the water service provider due to closed account or any other reason?

Answer: Grant recipients must adhere to the obligation and liquidation deadlines when determining next steps for funding from a LIHWAP supplemental payment that is returned by the water service provider. 

Prior to the Obligation Deadline (March 31, 2024)

This is within the period of performance. Grant recipients should follow established policies and procedures for their state, territory, or tribe and may issue funds as new benefit payments, or as supplemental payments, on behalf of any household that is determined to be eligible on or before March 31, 2024. 

After the Liquidation Deadline (June 30, 2024) 

Any benefit payments returned after the liquidation deadline must be returned to OCS by depositing funds into the grant recipients Payment Management System (PMS) account. 

6. Question: What steps can grant recipients take to prepare to issue supplemental payments?

Answer: To prepare to issue supplements, grant recipients should provide guidance to water service providers, coordinate with the water service provider to ensure accounts are active for eligible customers, and ensure the water service provider can accept the intended supplemental payment amount. Guidance should also be provided to local administering agencies. This effort in advance of issuing supplements will help limit the number of funds that are returned to the grant recipient.   

If you have any questions about the contents of this IM or would like a thought partner who is developing a strategy for issuing supplements, please contact your Program Specialist. 

Thank you for your attention to this matter.

/s/
Megan Meadows
Director

Division of Energy Assistance
Office of Community Services