Winter Heating Costs and Older and Low-Income Households - February 2011

Forty-one percent of older households have total household incomes of less than $20,000, and they typically experience the greatest energy burden[1]. This trend is projected to continue throughout winter 2010-2011.  The burden is highest for those using fuel oil for heating.  For example, age 65+ households heating with fuel oil with incomes under $20,000 will spend at least 20 percent of household income on heating costs, while all-income households heating with fuel oil will spend around 5 percent of total household income on heating costs.

Although consumption data show that low-income older consumers tend to use less heating fuel than higher-income groups, high winter heating costs are likely to be a greater burden on this group than on higher-income older consumers who have greater financial resources available to meet these costs. 

As average heating expenditures have continued to increase throughout the decade, the average LIHEAP[2] grant amount has remained relatively flat.  Consequently, the gap between heating expenditures and LIHEAP assistance received by eligible participants remains substantial.

Congress doubled LIHEAP funding two years ago and matched that level for the 2010-11 winter.  Currently, LIHEAP is funded through March 4, 2011 under the FY 2011 Continuing Resolution (CR). Total LIHEAP funding made available to states since October 2010 totals $4.1 billion.  As was the case for the two previous winters, applications for LIHEAP assistance through Winter 2010-11 have reached record levels[3].