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 was an effective way to reach more households and promote longer-term water affordability. In 2023, after discussions with grant recipients, OCS provided guidance indicating that it is allowable to leave credits on water and wastewater provider accounts in alignment with LIHWAP’s third priority of rate reduction. This allowed grant recipients to make benefit payments greater than a household’s current month or past due bill amount to reduce the rate of water or wastewater bills for future months. Grant recipients used a benefit matrix to determine the amount of credit a household would receive based on factors such as household income, household size, and household water cost and need.

Prior to releasing guidance, grant recipients were concerned that amounts determined by benefit matrices could exceed the dollar amount of a household’s past due bills and that it would be difficult for them to pay the actual current bill if the amount due had changed since the application’s submission. Allowing for credits on accounts permitted grant recipients to issue benefits based on the situational need of the household, rather than on the exact dollar amount of their bill. This practice allowed grant recipients to serve households more equitably as current and past due bill amounts varied greatly among income-eligible households. This variance was due to the vast number of water vendors with differing rates, fee amounts, and disconnection amounts, along with the limited use of water and wastewater disconnection moratoria.

In addition to providing credits, OCS allowed grant recipients to provide supplemental payments, which are payments credited to households that have already been deemed eligible and received a LIHWAP benefit. OCS issued guidance[29] concerning supplemental payments and allowed grant recipients to revise policies to provide previous beneficiaries with a supplement. Supplemental payments often resulted in a credit to a household’s water account. This provided households with longer-term water affordability for future months and further reduced the household’s water burden. In addition to providing more benefits to households, this allowed some grant recipients to ensure all LIHWAP funds were used to better address household water need before the end of the program.

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.

While LIHWAP’s legislation dictated that payments must be made to owners or operators of public water systems or treatment works, some households are not served by these systems, and it was impossible to meet their water and wastewater needs without making a payment to another entity. To be responsive to these needs and ensure that all eligible households in areas without a functional public water system or treatment works could maintain water and wastewater services, OCS examined and identified every possible allowable use of funds permitted by LIHWAP legislation. These flexibilities included supplying bottled water to households, providing septic tank services, and filling water cisterns. OCS provided specific guidance on when these flexibilities could be utilized.

• Bottled Water: Grant recipients could use LIHWAP funds to provide bottled water to households where clean water was not otherwise available, which included areas with lead-contaminated drinking supply systems, remote communities without access to public water systems, or areas facing water scarcity due to disaster. Water bottles could be provided through delivery services or by pickup.
• Water Cisterns: Grant recipients could pay vendors to fill water cisterns for households not connected to a drinking water system, typically in remote areas. Water cisterns are a type of tank used to hold a household’s supply of water, and they are usually refilled on a semi-regular basis, such as every three or four months depending on rainfall.
• Septic Tanks: Grant recipients could define wastewater treatment to include septic tank pumping in areas not serviced by wastewater (sewer) systems if payments were made by the grant recipient directly to a vendor. Many rural areas across the country rely on septic tanks for wastewater treatment and could not maintain continuous wastewater treatment without this flexibility.

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.[32] 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.