Thursday, October 22, 2009

OTDA Implements Amendment Easing Repayment Terms for Emergency Utility Assistance

We have previously discussed the erosion of the public assistance safety net created by the legislature under Section 131-s of the New York Social Services Law for utility customers facing service termination. See OTDA Must Relax Its Administrative Restriction on Utility Assistance Loans for Persons with Incomes Above the Public Assistance Level, PULP Network, July 29, 2008. Basically, a major problem arose after the Legislature required persons who are not recipients of ongoing monthly public assistance grants to sign agreements to repay emergency utility assistance grants in equal installments over the next 12 months. The state agency, OTDA, added a restrictive provision to its regulation, stipulating that no aid could be provided to an otherwise qualified applicant if prior aid had not been repaid:
Subsequent assistance to continue or restore utility service must not be provided unless any prior utility arrearage payments have been repaid or are being repaid in accordance with the schedule of payments contained in each prior repayment agreement as of the date of application for such subsequent assistance....
18 NYCRR § 352.5(e). Many low income workers with incomes slightly above the low public assistance need standard fall into the category of those who must sign a repayment agreement in order to get emergency utility assistance. In order to qualify, they must show they lack any other resources to pay the utility bill and could not get another deferred payment plan from the utility. (The utility can terminate service if the customer has breached a minimum payment plan agreement to repay the utility on terms as low as $10 per month plus the current bill).

The public assistance repayment requirement required a person to repay the department of social services in 12 months, so a $480 grant of aid meant a $40/month repayment requirement. For persons having difficulty paying high utility bills, and who could not pay the utility $10/month under its payment plan, and who lack savings and often run out of money for food and other essentials between paychecks, the public assistance repayment requirement was unrealistic.

This year, the Legislature changed the repayment requirement to stretch out the term of repayments from one year to two years. Thus, a recipient of a $480 grant to restore utility service would have a $20/month repayment requirement. OTDA issued instructions to local social services districts this week, 09-ADM-17, implementing the new statutory requirement. This will ease, but not solve the problem.

The problem is particularly acute during the summer and fall, when assistance under the federally funded seasonal HEAP program is unavailable. Powerless: Low-Income Households Facing Termination of Service with No Remedies, PULP Network, PULP Network, July 17, 2009.

Also, during the period November 1 - April 15, OTDA now allows counties, at their option, to provide emergency utility assistance to those who have not repaid previously granted assistance on schedule. OTDA Eases, but Continues, its Administrative Restriction on Assistance to Utility Customers with Incomes Above the Public Assistance Level, PULP Network, October 5, 2008. Some, but not all, counties have done this.

The change in the duration of the public assistance repayment agreements represents some movement on the part of OTDA in recognition of the failure of the existing program. OTDA apparently proposed the statutory change to the repayment period, but the OTDA administrative disqualification continues to cause great hardship, and may result in tragedies. See
Recipients of 131-s utility arrearage payment assistance may wish to make the installment payment to the County Department of Social Services first, before paying the utility, if they are are at risk of not being able to afford utility service in the future, in order to preserve their eligibility for future assistance grants.

For more information, see PULP's website page on utility assistance programs.

No comments: