Grant recipients have the flexibility to determine their own minimum and maximum benefit payment amounts according to local need. When LIHWAP began, the median maximum benefit amount for state grant recipients, as indicated on implementation plans, was $1,500, while the median amount for tribes was $700. As administering agencies received applicant water bills and learned more about the cost of water and wastewater in their area, these payment limits were adjusted to serve households more effectively.

After the utility disconnection moratoria enacted during the COVID-19 pandemic ended, many households with low incomes across the country were left with very large past due bills. In several cases, grant recipients raised maximum payment limits to pay the total amounts of these water bills to prevent disconnection of service. Minimum payment limits were also adjusted to ensure households served by systems that had not fallen under disconnection moratoria received the support they needed to prevent service disconnection. Some of these households did not accumulate large past due balances but still needed assistance paying their relatively smaller bills to reconnect or prevent disconnection of services.

Providing credits on water accounts has proven effective in reaching more households and promoting long-term water affordability. In 2023, OCS permitted leaving credits on water and wastewater provider accounts, aligning with LIHWAP's priority of rate reduction. Grant recipients used a benefit matrix to determine credit amounts based on factors like household income, size, and water cost. This approach allowed for equitable service, addressing variations in current and past due bill amounts among income-eligible households with diverse water vendors and disconnection policies.

Data matching, the process of identifying applicants who may be eligible for LIHWAP through other existing databases, has proven to be an effective strategy to expedite assistance to households. Grant recipients can work within their agency, with other agencies, or with water and wastewater vendors to identify eligible applicants by securely sharing eligibility and water need data. Grant recipients have approached data matching in different ways; however, overall, the practice allows for more effective outreach, reduces benefits processing time, and increases households served.

LIHWAP’s novelty as the first-ever federal water bill payment assistance program meant that grant recipients had to be thorough in their outreach approaches. When programs opened, many households were unfamiliar with LIHWAP and grant recipients had to develop creative strategies and partnerships with local agencies, vendors, and other organizations to reach eligible households.

To address challenges in areas without public water systems or treatment works, LIHWAP examined allowable fund uses, including providing bottled water, septic tank services, and filling water cisterns. Specific guidance was provided to grant recipients on when these flexibilities could be employed:

Bottled Water:

• LIHWAP funds can be used to supply bottled water in areas lacking clean water, such as those with lead contamination, remote communities, or areas affected by disasters.
• Water bottles can be delivered or picked up.

Water Cisterns:

• Grant recipients can use funds to fill water cisterns for households not connected to a drinking water system, especially in remote areas.
• Cisterns hold a household's water supply and are typically refilled semi-regularly, depending on rainfall.

Septic Tanks:

• LIHWAP funds can cover septic tank pumping in areas without wastewater (sewer) systems, with payments made directly to a vendor.
• This flexibility is crucial for many rural areas relying on septic tanks for wastewater treatment.

Long before LIHWAP was created state grant recipients used networks of subcontracted local agencies to administer various anti-poverty programs (such as LIHEAP and the Community Services Block Grant). These local agencies partner with states on outreach, administration, intake, and eligibility determination . Collaborating with this strong network of partners was helpful for setting up LIHWAP in many states. States worked with these local agencies to design state plans as well as develop and implement outreach strategies. Most importantly for this new program, local agencies worked closely with states to identify problems and potential program improvements in real time while administering the program on the ground level.

Several states have struggled to provide benefits to households with liens on their property because of past due water and wastewater bills. These liens were placed on properties before the availability of LIHWAP assistance. In all states, households served by publicly owned water and wastewater utilities are subject to having liens placed on their property for delinquent bills.[39] Liens due in part or in full to delinquent water bills can be sold at auction sales and potentially lead to loss of home ownership, and liens can be placed on homes for past due amounts as low as a few hundred dollars.

Though water liens are allowed by every state, laws vary by municipality, and they are more common in some states than others. A few LIHWAP administrating agencies have been successful in working with municipalities and applicants to redeem property liens because of past due water and wastewater bills and put households a step closer to restoring their property rights.