In response to the COVID-19 public health emergency and the critical need to ensure continuous water access to combat the spread of the virus, Congress authorized $1.1 billion in emergency funding to assist households struggling to afford their water bills. This funding included $638 million from the Consolidated Appropriations Act (CAA 2021) and $500 million from the American Rescue Plan Act (ARP 2021).[25] The Department of Health and Human Services (HHS), through the Administration for Children and Families’ (ACF) Office of Community Services (OCS) was tasked with administering LIHWAP. LIHWAP funds were awarded to 49 states, the District of Columbia, five U.S. territories, and 97 Native American tribes and tribal organizations.[26] The legislation mandated that funds should be used to make payments to owners and operators of water systems on behalf of households with low incomes and therefore did not allow the flexibility to provide a LIHWAP benefit directly to a household.

The legislation also indicated that LIHWAP should “as appropriate and to the extent practicable, use existing processes, procedures, policies, and systems in place to provide assistance to low-income households, including by using existing programs and program announcements, application and approval processes.” OCS therefore leveraged the processes, procedures, policies, and systems of the existing Low Income Home Energy Assistance Program (LIHEAP) in designing and implementing LIHWAP. For example, OCS mirrored LIHEAP’s eligibility guidelines for LIHWAP. To be eligible for LIHWAP, households needed to have a water burden or pay a fee that covers the cost of water or wastewater services (e.g., a water bill, tribal membership fee that includes water services, rent that includes water, etc.) and meet income guidelines. Income guidelines established in the LIHWAP Supplemental Terms and Conditions required households to meet one of the following criteria:

• Have a household income at or below 150% of the federal poverty level
• Have a household income at or below 60% of the state median income
• Be categorically eligible[27] through enrollment in another means-tested program such as LIHEAP, Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income, or a means-tested veterans’ program

OCS also encouraged grant recipients to house LIHWAP in the same agency that administers LIHEAP. Doing so allowed for a more streamlined implementation process and the ability to tap into the extensive service provider networks (including Community Action Agencies and local social service agencies) already in place across the nation. This also allowed grant recipients to leverage established LIHEAP information technology and add additional programming to expedite LIHWAP’s administration. Following OCS’ recommendation, all participating states chose to house LIHWAP in the same agency as LIHEAP.