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Issue Alert - 04-08-03 -REVISED

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Sep 17, 2004

Issue Summary:

Low Income Home Energy Assistance Program (LIHEAP), which assists low-income clients with shut off notices for utilities, is now an automated process for those receiving the Family Independence Program (FIP), the Food Assistance Program (FAP) and Social Security Income (SSI).

Persons Affected:

Households receiving FIP, FAP, and SSI who have a utility shut off notice

For More Information:

Lisa Ruby Michigan Poverty Law Program611 Church St. Suite 4AAnn Arbor, MI 48104-3000(734) 998-6100 ext. 33Fax: (734) 998-9190 Email:


Low Income Home Energy Assistance Program and State Emergency Relief

What's Happening?

The Family Independence Agency is implementing an automatic Direct LIHEAP payment plan for current recipients of FIP, FAP and SSI who are facing a utility shutoff from either Consumers Energy, DTE Energy, or SEMCO. The LIHEAP payments will be credited electronically directly to the recipients’ utility bill. This allows these recipients to get help with utility shut offs automatically and without a SER application. LIHEAP payments (alone or in combination with previously issued SER) an only be paid up to the caps for the relevant fiscal year. REVISED 04/04/05 - DHS will no longer make automatic LIHEAP payments for clients who receive FAP only. FAP only clients who are threatened with a utility shutoff can still apply for State Emergency Relief through the paper application process.The process:Beginning with the test run in September 2004, and then daily once the project is fully implemented, the energy providers listed above will send FIA a list of people who are in a “shutoff” status. FIA will compare the names on this list with the names of current FIP, FAP and SSI recipients. These recipients will be considered automatically eligible for the LIHEAP-Direct payment, if the families have any remaining money available under that SER fiscal cap.(*See below) FIA will then forward the payments directly to the energy provider for each eligible client for the amount of the bill up to the fiscal cap. A LIHEAP direct payment will guarantee that the shutoff will be postponed for at least 30 days. FIA will send a notice to the client of the payment made to the energy provider, the amount paid and if the SER fiscal cap has been reached. The client will not receive a shutoff notice from the energy provider while the client is in the LIHEAP direct program. * The SER fiscal caps beginning on October 1st, 2004 are as follows: 1. Natural gas and wood: The fiscal year cap is $550<BR>2. Deliverable fuels except wood (fuel oil, propane, coal, etc…): The fiscal year cap is $850<BR>3. Residential electric: The fiscal year cap is $550<BR>4. All-electric home(combined heat and residential use): The fiscal year cap is $1100<BR>5. Security deposits/fees for energy services: The fiscal year cap is $200 per occurrence Once the client has reached the fiscal cap, they can no longer receive LIHEAP direct funds. Clients can still apply for an SER overcap exception, ES or local funds. Clients who are not eligible for the LIHEAP direct or who not customers of Consumers Energy, DTE Energy, or SEMCO can still apply for assistance through the SER process. If there are not sufficient LIHEAP funds to pay for all potentially eligible persons, FIA will prioritize the payments to individuals based on program type. FIP recipients will receive first priority, followed by FAP recipients then SSI recipients. Vendor payments:Clients who receive a direct LIHEAP payment and receive FIP will be automatically enrolled in a vendor payment plan for the type of service that was paid i.e. if the electric bill from Consumers was paid with direct LIHEAP money, then FIA will place the FIP recipient in the vendor program for Consumers if the grant allows. FIP recipients can request that the vendor service be closed at any time. However, if the client remains on the vendor system for 5 consecutive billing cycles, the client will then receive a 25% match of the LIHEAP payment on the 6th billing cycle. Clients will still be eligible for the funds if they leave FIP during the 5 month billing period but continue to make the payments. It is therefore in the clients’ interest to remain in the vendor system. For example, Client A received a direct LIHEAP payment of $550 (the fiscal cap for natural gas) in January for her gas bill with Consumers Power. She is a FIP recipient so she is automatically enrolled in the vendor program. She stays with the vendor program for 5 billing cycles. On the 6th cycle, she receives an additional $138.75 ($550 x .25) applied directly to her Consumers account. If that amount creates a credit, the energy provider will apply the credit to future billings. The SER 6 month payment emergency not “client caused” requirement: In order for applicants to be eligible for SER energy or utility payments, they must have made payments to the utility company for the previous six months unless they had “good cause” for not making the payments. Clients eligible for LIHEAP-direct payments, however, do not have to meet the SER six month previous payment requirement to receive LIHEAP funds. Clients who are not customers of Consumers Energy, SEMCO, or DTE will still have to apply for SER and meet the 6 month payment requirement to receive help. FIA is hoping to expand the LIHEAP direct program to other energy companies next year. For more information on the 6 month payment requirement see FIA manual SER 204. You can access it on the internet at:

What Should Advocates Do?

Advocates should make clients and agencies that provide assistance with energy shutoffs aware of the new procedures and the benefits of staying on the vendor program. Advocates who provide energy assistance should contact their local FIA office to see how the process will work in their county, especially regarding the 6 month required payment rule for those who are and for those who are not eligible for LIHEAP direct services. Advocates and agencies should be aware that clients who are coming in for assistance with a shut off notice may have already reached their SER fiscal cap limit.REVISED 04/04/05 - Advocates should make clients who receive FAP only that they are no longer eligible for assist through the LIHEAP program, but that clients can still apply for assistance through the SER paper process.

What Should Clients Do?

Clients should become familiar with the new program and the benefits of the vendoring program. Clients should monitor any notices they receive from any participating energy supplier regarding shut off notices or payments from FIA. They should also monitor any notices from FIA regarding any payments they made to the customer’s utility bill. Be aware that FIA will only make payments up to the SER fiscal cap and should send a notice when the cap has been reached. REVISED 04/04/05 - Clients who receive FAP only should be aware that they can still apply for assistance through the SER paper process.

Finding Help

Most legal aid and legal services offices handle these types of cases, and they do not charge a fee. You can locate the "free" legal services or legal aid office that serves your county on the Michigan LawHelp web site ( or look in the yellow pages under "attorneys" or call the toll-free lawyer referral number, (800) 968-0738.