Nearly a Quarter of LIHEAP Funds Are Not Spent on Direct Household Energy Assistance, with Four Percent Reserved in FY25

This brief examines how states allocated Low Income Home Energy Assistance Program (LIHEAP) funds from FY16 through FY25, including spending on direct energy assistance, weatherization, administrative and other activities, and funds carried over to subsequent fiscal years. Key findings include:

• LIHEAP funding spans five categories:
  1. Direct energy assistance: As subsidy to help with home heating or cooling costs or in the event of crisis when a household is without or nearly without home energy
  2. Weatherization assistance: Projects that increase the energy efficiency of homes to reduce the need for future energy assistance
  3. Administrative spending: Costs associated with administering the LIHEAP program
  4. Other spending: Includes nominal payments to households, technology-related updates, energy self-sufficiency activities, or leveraging non-federal funds for the program
  5. Carryover funding: Any funds not spent on the above categories can be obligated to the next federal fiscal year (less than 10 percent)
• Since Fiscal Year 2016 (FY16), states have consistently spent most of their LIHEAP funds on direct energy assistance, with an increase following increased LIHEAP funding during the COVID-19 pandemic.
• In FY25, states spent an average of over 75 percent of LIHEAP funds on direct energy assistance for households. They spent around 10 percent on weatherization assistance, eight percent on administrative spending, and two percent on other forms of spending, with the rest (four percent) carried over to the next year for future LIHEAP needs.
• In terms of dollars, these proportions amount to about $3 billion in spending for direct energy assistance to households, with $1 billion going towards non-energy assistance related activities, including $180 million carried over to the next fiscal year.
• LIHEAP allocations vary widely state to state. For example, in FY25 states ranged from 55 percent to 93 percent on direct energy assistance and zero to 25 percent on weatherization assistance.
• Administrative spending tended to be more similar across states in FY25, hovering at or just under the 10 percent cap; spending on “other” LIHEAP activities was similarly stable across most states, though much lower, with the majority of states spending little to $0 in this category.
• Nearly 80 percent of states had unused funds in FY25, carrying over around four percent on average – less than half of the 10 percent limit – to the following fiscal year.

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