Everything You Need To Know About A Utilities Allowance



What Is A Utilities Allowance?

With the cost of living rising almost daily and wages creeping higher at a snail’s pace, many are struggling to make ends meet. Luckily for people with this problem, government assistance programs can help bridge the gap. One such assistance program, the utilities allowance program, regulates how much people participating in the Department of Housing and Urban Development’s (HUD) rent assistance program pay for their utilities. This assures that low income households can afford rent and utilities without breaking the bank.

Who Qualifies?

Qualification for the utilities allowance program vary based on income and cost of utilities by state. For example, someone in California might need more assistance for utilities than someone in Kansas, even if they have the same income. This form of living assistance coincides with rent control and other federally and state-run programs for low income housing. Because the income requirements for each of the programs vary by region, you will need to contact your local public housing agency (PHA) to see if you qualify. They will have you fill out an eligibility form and evaluate your eligibility. Once accepted, you can qualify for a variety of benefits, including a utilities allowance.

The Numbers

According to HUD, the resident’s share of a utilities allowance could range anywhere from less than $10 to over $200 per month, depending on the income, the PHA, the number of utilities covered, and the dwelling or household size. Regardless, the monthly rent, which includes both housing and utilities, should be less than 30 percent of monthly income. HUD provides this assistance to over 1.3 million households across the country.

Types Of Monitoring

The amount of utilities allowance someone receives also depends on the number of units of energy that household uses. If that person lives in an apartment, it can become confusing because of the division of common utilities, like trash, among the tenants. Luckily, HUD has several ways of calculating the utilities allowance for a household. There are three methods of metering the utilities used by a household, which determines how much of a utility allowance a tenant receives:
  • Master metered, which measures utility consumption for the building as a whole.
  • Checkmetered, which measures the consumption of utilities by apartment through what is called a checkmeter.
  • Individually metered, in which the utility use is metered individually by household.
Because of how confusing it can be to monitor utilities in a group, master metered buildings do not have utility allowances.

Is A Utility Allowance Right For You?

Just like with most government programs, only a small portion of people qualify. So, before accepting a utility allowance, evaluate your need. If you don’t need the money, let those who need the funds most benefit from the program. Talk to your local PHA for more information on this program and other ways to save money on utilities.

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