LIHEAP on the Chopping Block in Proposed 2027 Budget

Millions of Americans rely on help to keep the lights on, the heat running, and their homes safe during extreme weather. But a new federal budget proposal could change that.

The fiscal year 2027 budget put forward by President Donald Trump calls for eliminating funding for the Low-Income Home Energy Assistance Program (LIHEAP) — a long-standing program that helps low-income households pay their energy bills.

If approved by Congress, this change could leave many families scrambling to cover essential utility costs.

So what exactly is LIHEAP, who depends on it, and what can you do if these changes move forward? Here’s what to know.

BenefitKarma keeps you up-to-date on major benefit changes like this so you can plan ahead and protect your household.

What is LIHEAP and why it matters

The Low-Income Home Energy Assistance Program (LIHEAP) is a federally funded program that helps eligible households manage home energy costs.

It supports both heating and cooling needs, which is especially important in areas with extreme winters or summers.

We go into detail about how this program works, and what it helps pay for in our LIHEAP article.

What LIHEAP helps pay for

• Monthly heating and cooling bills
• Emergency energy assistance (like preventing shutoffs)
• Crisis situations (such as no heat in winter)
• Minor home energy upgrades (like weatherization improvements)

For many households, LIHEAP isn’t just helpful—it’s essential for health and safety.

Why the program is at risk

The proposed budget eliminates LIHEAP as part of broader efforts to reprioritize federal spending.

The program is currently administered by the U.S. Department of Health and Human Services (HHS), which distributes funds to states. Those states then run their own LIHEAP programs based on federal guidelines.

If funding is removed:

• States would lose federal support for energy assistance
• Many existing programs would shrink—or disappear entirely
• Households would need to find alternative help quickly

This would mark a major shift away from decades of federal support for basic utility needs.

How many people could be affected

The numbers help show just how large this impact could be.

• 6.1 million households received LIHEAP benefits in 2026
• The average benefit was about $401 per household
• Only about 20% of eligible households currently receive help

That last point is critical.

Even with funding, most eligible households already don’t receive assistance due to limited resources. If LIHEAP is eliminated:

• That 20% drops to 0%
• Millions of households lose direct support
• Many more who might qualify in the future lose access entirely

What losing LIHEAP could mean for households

1. Higher energy costs out of pocket

Without LIHEAP, households would need to cover full utility bills—often during the most expensive seasons.

2. Increased risk of shutoffs

Emergency assistance helps prevent electricity or heating disconnections. Without it, more families could face utility shutoffs, especially in winter or heat waves.

3. Health and safety risks

Energy isn’t just a convenience—it’s tied to:

• Safe indoor temperatures
• Medical equipment (like oxygen machines)
• Food storage (refrigeration)

Losing assistance could increase health risks for seniors, children, and people with disabilities.

Households may be forced to choose between paying utility bills, buying groceries, or covering rent or medication.

What you should do right now

If you currently receive LIHEAP (or think you might qualify), here are steps you can take to prepare:

1. Stay informed on the budget process

This proposal is not final yet. Congress must review and approve the budget before changes take effect.

2. Look into local assistance programs

Even if federal funding changes, some support may still exist through:

• State or county programs
• Utility company assistance plans
• Local nonprofits and charities

Search for:

• “energy assistance near me”
• “utility bill help [your state]”

3. Contact your representatives

You can share your perspective with elected officials. Budget decisions can change, and public input can matter.

4. Reduce energy costs where possible

Consider:

• Weatherproofing your home
• Using energy-efficient appliances
• Asking your utility provider about budget billing plans

5. Apply while funding is still available

If LIHEAP is still active in your area, applying now could help you secure assistance before any changes happen.

How this compares to other benefit programs

Unlike programs such as food assistance or healthcare, LIHEAP is:

• Discretionary funding (not guaranteed year to year)
• Distributed through state-run systems
• Often limited by available federal budgets

That’s why only a portion of eligible households receive help — and why proposals like this can have such a large impact.

The bottom line

The proposed elimination of LIHEAP would remove a critical source of support for millions of low-income households struggling with energy costs.

While the budget is still under review, the potential impact is significant—especially for those already facing tight financial situations.

If this change moves forward, households will need to rely more heavily on local programs, nonprofits, and personal budgeting strategies to cover essential energy needs.

Staying informed is your best defense. BenefitKarma will continue tracking this proposal and other major benefit changes so you always know what’s coming and how to respond.