Baby, it’s cold outside, and new rules make it harder to get help in Michigan

The state of Michigan has assumed administration of energy assistance programs from nonprofits, which has some advocates fearing fewer needy residents will get relief from heating bills this winter.

DETROIT –  Two months after Michigan implemented significant changes to its emergency heating assistance program, advocates fear needy residents won’t get the help they need to keep the heat on this winter.  

The biggest change: The state is taking over administration of the program  that doles out $45 million in federal funds to residents who’ve had heat shut off or are about to lose service  – and intends to enforce a long-ignored policy that can deny help to those with as little as $50 in savings.

“My main concern is that people are going to come in and we’re not going to be able to help,” said Matt Phillips, chief operating officer of The Heat and Warmth Fund.

“My tool belt has a Fisher Price (toy) screwdriver in it all of a sudden.”

The changes in the program have received little publicity, even as Michigan officials estimate about 800,000 residents don’t make enough money to pay their energy bills. Dozens of interviews with those who work at community agencies, state workers and those seeking help reveal the the bumpy rollout of the state taking over the program is making it harder to get relief.

“Up until Oct. 1 (when the rules changed), somebody who had no electricity could walk in our door and we could say, ‘of course,’” Phillips said. “We can’t do that anymore. We have to say, sorry, now you’re going to have to wait.”

Last year, the program helped about 122,000 Michigan families keep power or heat on. Because of limited funds for the program, that was roughly only 12 percent of the families who needed help, and advocates fear that percent will be even lower this year.

For the past few years, the state has relied on large nonprofits like THAW, The United Way or the Salvation Army to administer the program. Those agencies worked with low-income people in their offices and rarely used an “asset test” to determine who to help.

Such tests, which measure both savings and property, are common in public assistance programs such as Medicaid or food stamps. But those are ongoing programs, whereas crisis energy assistance is often a one-time payment.

Before this year, a family had to be needy before getting energy help. For families of four, that meant they couldn’t make more than $37,000 a year.

To get help this year, recipients must now not only be needy but close to desperate. State regulations say more than $50 in the bank or retirement account or even a pre-payment on a funeral must be used “to assist in resolving the emergency.

Matt Phillips, chief operating officer The Heat and Warmth Fund, says recent changes to energy assistance programs have removed a tool to help those in need.

In practice, Phillips said this means an offer for $850 in state help can easily come along with a requirement to pay more than $1,000 as a co-pay.

“Non-cash” assets also count against families, unless they already receive public benefits. Owning a second car worth more than $3,000, for instance, would disqualify families of more than two from getting one-time help.

Phillips worries the changes will disqualify people who may have some savings but not enough to pay their bills. In the two months since the overhaul, THAW is helping 20 people a day apply for help, down from around 65 a day at this time last year.

State officials defend the changes as a way to deter fraud.

“That asset test is something the state has put in place through legislation due to people winning the lottery and still coming into our door and getting assistance and us not being aware of that,” said Kenton Schulze, who heads the Low Income Home Energy Assistance Program (LIHEAP) and Temporary Assistance for Needy Family (TANF) programs for the state Department of Health and Human Services.

He stressed the asset test has been state policy for years, even if it was rarely enforced.

“We want to make sure we are checking some of those assets so we are helping the most at need,”  Schulze said.

Schulze is referring to two notorious cases earlier this decade when two separate million-dollar lottery winners took one-time lump sum payments and used loopholes to continue to collect food stamps.

The state doesn’t regularly require energy companies to provide shut off numbers so it’s hard to determine how many families lose their heat in the winter, though DTE alone shuts off around 20,000 customers each month. Energy companies can shut off customers once they are more than $100 and 10 days behind in paying their bills.

There are exceptions: Residents who older than 65, in the military, have emergency health issues or are extremely poor (less than 150 percent of the federal poverty level) can sign up for plans administered by utility companies that prevent shutoffs if they pay a portion of their bill. The protections end every April 1.

The federal money at the heart of the asset test tension between community agencies and the state is meant to help low income people who aren’t covered by the shut-off protection the utility companies offer.

Few states use such tests

Michigan is one of 11 states that require these asset tests for emergency energy assistance. The state has long used asset tests for food stamps and cash assistance.

None of the state’s asset tests are cut and dry, and one manual case-workers rely on to make asset decisions is 72 pages long.

Social welfare experts say the tests make it harder for families to get back on their feet. More than a decade of research published in academic journals and even studies from the United States Department of Agriculture show asset tests cost more than they save.

The research has found the tests are time consuming to administer and make it difficult to escape poverty, since they discourage any savings.

“If we were really using data we wouldn’t have the programs we do, but we’re writing policy around this outlier supposed scofflaw we fear,” said Kristin Seefeldt, an assistant professor in social work and public policy at the University of Michigan who researches poverty.

“There is no way to design a system where one person isn’t going to be able to game it,” she said. “For the most part, social policy has been ideologically driven.”

The changes are affecting folks like Edward, a Detroit resident who didn’t want his full name publicized to protect his privacy.

He has been a police officer for 15 years, and owes DTE close to $2,500 after bills piled up after a divorce a few years ago and he inherited his ex-wife’s debts.

Utilities were shut at his home because he said he needed to choose between paying his mortgage and energy bills. The home is now empty as he stays with his brother.

“I’m a taxpayer and I’m gainfully employed,” he said. “If I need a little help I feel like I should be able to find it.”

He said he needs $1,600 to restore service. Last year, he could have received help from THAW. This year, that’s unlikely because he makes too much money.

“I would need to make only $17,000 a year because I don’t have kids,” he said. “When $17,000 is your ceiling you are going to be missing a lot of people.”

“It’s almost demoralizing to ask for help and to be told you don’t need it,” he says. “I just want to know where I can get some help.”

Change made for efficiency

Michigan officials say the changes will help make the energy assistance program run more smoothly and get help to more people.

Along with introducing the asset test, the state will also now allow people to apply for assistance all year long instead of limiting asks to a few months as they did last year. Overall, the state says the changes are about efficiency and fairness.

“We can’t have a client in the state of Michigan going to THAW and maybe be able to go to True North or Salvation Army and get it decided another way,” Schulze said. “So that was the main reason. Our workers, we have an efficient process.”

But a supervisor at DHHS who did not want to identify herself for fear of losing her job says otherwise.

This person was unaware of the any changes made to energy assistance programs and said workers had not received any training on the change even though the past month was “crazy with shut-off notices.”

“Last year, it was easy for clients but it was work intensive for us,” the supervisor said.

“Now it will be easy for us but hard on them” because so much of the application process is now online and automated.

Schulze said the state doesn’t yet have metrics picked out to measure the impact of the changes, but are working on them with several agencies.

That’s a positive step, said Phillips of THAW.

“I don’t want to perpetuate the feeling that hope is lost,” he said.

Phillips said DTE has begun working with the agency closely and now allows them to put customer shut offs on hold for about a week while they see if they can help the customer, something the state does too while people wait to see if they can get help.

A spokesman for DTE said the company is working with nonprofit and has donated $10 million to community agencies to help low-income residents with past and current bills.

“We still want customers to come in because have the technology to get them connected and we do have some limited funds that allow us to provide help to Detroiters” Phillips said.

About the author

Sarah Alvarez is founder of Outlier Media, a journalism service that delivers data reporting and information to low-income news consumers over text messages.

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Thu, 12/13/2018 - 9:04am

Nothing wrong with checking assets. When he residents money is being given through a state agency to someone who wants use of that money, due diligence is the name of the game.

And perhaps financial education should be included. Too many using government aid programs who have the latest phone or the fanciest nails.

Thu, 12/13/2018 - 9:20am

Sounds like a noble cause. Then I saw an interview with Shaunteel Jenkins in her office on TV. I saw where a lot of cash goes. Like her over the top office furnishings. I found other "charities" to support.

Thu, 12/13/2018 - 9:28am

So roughly 10% of Michigan residents can't afford their energy bill, but we can't raise the minimum wage. Cool, I'm glad our politicians have the interests of their rich donors at heart, while we means test people who are freezing to death with $50 in savings.

Thu, 12/13/2018 - 3:15pm

So about 4% of workforce earns minimum wage (old stats, so probably significantly less in today's labor market) and most of those are kids and /or working less than full time, without utility bills anyway! So main problems leading to nonpayment are likely elsewhere from your class warfare explanations.

Kevin Grand
Thu, 12/13/2018 - 6:44pm

When THAW used to go out and raise money all on their own (WWJ in Detroit did "radiothons" for them at the time), I had no problem donating to them.

When they felt that it would be more financially advantageous to skip asking for donations and just have the government simply take it (look up PA 95 of 2013), I had lost all respect for that organization.

Be careful of using a "middleman" to do your fundraising (rather than do it on your own).

The terms of that "arrangement" eventually won't be to your liking.

James Gradot
Fri, 12/14/2018 - 11:05am

It appears the agencies like the heat and warmth fund weren't following the rules in the past and just paying the bills for anyone who asked for it. Now they're mad because the state is enforcing the rules.
That's fine and dandy if it's their money they're using, but if it's my tax money they're giving away I'm glad the state is following the rules & only paying bills for those who meet the requirements.