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Expanding the Tool Kit: Affordable Energy beyond Energy Assistance

Expanding the Tool Kit: Affordable Energy beyond Energy Assistance. Roger D. Colton Fisher, Sheehan & Colton Belmont, MA National Community Action Foundation (NCAF) November 2005. The Need for a Toolkit Approach. “When your only tool is a hammer, you tend to see every problem as a nail.”.

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Expanding the Tool Kit: Affordable Energy beyond Energy Assistance

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  1. Expanding the Tool Kit:Affordable Energy beyond Energy Assistance Roger D. Colton Fisher, Sheehan & Colton Belmont, MA National Community Action Foundation (NCAF) November 2005

  2. The Need for a Toolkit Approach “When your only tool is a hammer, you tend to see every problem as a nail.”

  3. Three “new” tools:Sources of “energy-based” supplemental income • Food Stamp “excess shelter deduction” • Earned Income Tax Credit (EITC) • Public Housing Authority (PHA) utility allowances

  4. Tool #1:The Excess Shelter Deduction • Food Stamp eligibility based on “countable income.” • Shelter expenses above 50% an income deduction. • Shelter = rent/mortgage + utilities (include telephone) • Actual shelter costs/Standard Utility Allowance (SUA)

  5. FS Excess Shelter Deduction:Reason to Pay Attention • If household income is lowered: • Some qualify for Food Stamps when they otherwise would not • Some qualify for more Food Stamps • Every $3 reduction in income yields $2 in benefits. • Implications for spike in fuel prices! • Customers indifferent as to source of dollars.

  6. Excess Shelter Deduction:Why do it? • $30 - $40/month for low-income HHs • Dollar-for-dollar passthrough to feds • USDA supports and encourages • Elderly/disabled have no maximum on excess shelter deduction.

  7. Excess Shelter Deduction:What should I look for? • Take increased energy prices into account. • Take load curves into account (not simply average) • Take water and wastewater into account • Take all components of telephone bills into account.

  8. The Excess Shelter Deduction:What needs to be done? • Update the Standard Utility Allowance (SUA) annually • Ensure HHs are reassessed in light of increased energy bills.

  9. Tool #2:The Earned Income Tax Credit • Country’s primary anti-poverty program. • Refundable tax credit (cash back). • Average refund: around $2,000. • 3-year retroactive refund application.

  10. Earned Income Tax Credit:Reason to Pay Attention • 1/3 used to pay for past-due utility bills. • Only 50 - 80% of eligible claim. • Potential for innovative CAA/fuel fund role. • Receipt at time of winter heating bills

  11. How Families Use the EITC

  12. Earned Income Tax Credit:What need to be done • Mass utility outreach campaigns (NJ) • “Gap filler” outreach campaign • Part-time workers • Women-workers • Hispanic workers • VITA campaign (Illinois--Ameritech) • Targeted outreach • Call center recorded message

  13. Tool #3:PHA Utility Allowances • Tenant-paid utilities: • Public housing • Assisted housing • Covers: • Electricity • Heating/Cooling • Water/Sewer

  14. PHA Utility Allowances:Reason to Pay Attention • Covers (theoretically) 100% of bill • Year-round -- not seasonal • Regular update (if enforced)

  15. PHA Utility AllowanceWhat to look for • Annual review of utility allowances. • Adjust when “rates” change by 10% or more. • Retroactive to date of rate increase

  16. PHA Utility Allowances:What Needs to be Done • Review utility allowances to ensure annual update. • Provide notice to PHAs whenever rates change by 10% or more. • Review whether utility allowance pays for cooling. • Review reasonableness of utility allowances: • Call for help!

  17. For more information: http://www.fsconline.com News Library

  18. For more information: roger@fsconline.com

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