Financial Resources to Help Low-Income Seniors During Times of Inflation

From: www.assistedliving.org

Many seniors live on a fixed income, making it difficult to pay for expenses. The challenge grows especially for low-income seniors during times of inflation, when costs increase but the amount of money you have coming in stays the same.

Nearly 90% of people aged 65 and older receive Social Security benefits, and over 15 million older adults are economically insecure. Although the Social Security program has a built-in cost-of-living adjustment, the benefit amount only increases once a year, so many seniors face even more financial pressure as costs rise. When inflation impacts your spending power, it becomes more difficult to pay for housing, food, medicine and other necessities. Thankfully, there are a number of government programs available to help seniors meet these needs.

This guide provides information on a variety of financial resources to help you pay for necessities, such as health care, groceries and utilities. In addition to national resources designed to help seniors and other low-income people, you can find information about state programs that may assist you.

Utility Assistance Programs

Utility bills can be a large portion of a senior’s monthly expenses. The federal government has programs that can help you pay these bills and make your home more energy efficient.

Low Income Home Energy Assistance Program (LIHEAP)

The Low Income Home Energy Assistance Program (LIHEAP) is a federally funded program that helps eligible households pay their energy costs. The program is administered at the state and tribal level, meaning there can be some variation in the amounts and types of benefits available.

Most jurisdictions offer to pay one heating or cooling bill each year. For heating, this can be an electricity bill or the cost of heating fuel. In hotter states, the grant is typically used for electricity bills during months with high air conditioner use.

Emergency assistance may be available for households that have had, or are at risk of having, their electricity shut off. This assistance may also pay for repairs, such as for a broken furnace.

States receive a limited amount of money for this program, and in some areas there may be a waiting list for assistance.

Who Is Eligible?

The program is available for all low-income households. Your total household income must be less than your state’s limit. In some areas, you may also have to provide a final notice bill.

How to Apply

Contact the appropriate agency in your state to find out the application process in your area. Your local Area Agency on Aging may also be able to provide you with application information.

Low Income Household Water Assistance Program (LIHWAP)

The Low Income Household Water Assistance Program (LIHWAP) helps low-income households pay for their water and wastewater bills. As with LIHEAP, application processes and benefits can differ depending on your location. The program generally pays benefits directly to water or wastewater companies to reduce the arrears or rates of recipients.

Who Is Eligible?

The program is available to low-income households that meet the state’s income limit, which can’t be greater than 150% of the federal poverty line or 60% of the statewide median income. States may have additional eligibility criteria or prioritize applicants to ensure that those with the greatest need receive help first.

How to Apply

Contact your local agency to learn about the application process in your state.

Weatherization Assistance Program (WAP)

Although the Weatherization Assistance Program (WAP) isn’t strictly a utility assistance program, it can help lower your utility bills. The program helps low-income households make their home more energy efficient by adding insulation, caulking doors and windows, repairing inefficient appliances and more.

This program is administered by individual states, so benefits and eligibility differs. This allows providers to focus on the needs of the local community.

Who Is Eligible?

The main eligibility criteria for WAP is income. Applicants must have an income at or below 200% of the federal poverty level, or receive Supplemental Security Income. Priority is given to older adults, people with disabilities and families with children. The program is open to both homeowners and renters, although renters must pay their own heating and cooling bills to be eligible.

How to Apply

Contact your local agency for information on the application process. You will have to provide proof of income, such as Social Security benefit payments.

Tax Credits and Deductions for Senior Citizens

The government offers a number of credits and deductions that can help lower the income tax burden for older residents. The extra money you receive in your tax refund can help you pay for housing, nutrition, health care expenses and more.

Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) provides a tax break to low- and moderate-income people. In the past, it was only available to those with dependent children, but it’s now offered to all individuals who earned income during the tax year. It’s important to note that this credit is only available to people who worked; Social Security or other retirement income doesn’t qualify.

In 2022, a credit of up to $1,500 is available for people without children and up to $6,700 for those with dependent children. Seniors raising grandchildren may qualify for the higher amount if the children are claimed as dependents on their tax return.

Who Is Eligible?

To be eligible for the EITC, you must meet the following qualifications:

• Have worked
• Earned less than the limit
• Have less than $10,000 in investment income
• Be a U.S. citizen or resident alien for the full year
• Have a valid Social Security number

People without a dependent child must also have their main home in the United States for more than half the year.

How to Apply

The EITC is claimed on your federal tax return. Those aged 65 and older can use Form 1040-SR if they fill out a paper copy, which has a larger type and boxes. If you’re claiming a dependent child, you must also file Schedule EIC.

Credit for the Elderly or the Disabled

The Credit for the Elderly or the Disabled provides a tax credit for older adults and people with certain disabilities. The amount of the credit ranges from $3,750 to $7,500.

Who Is Eligible?

People who are aged 65 or older at the end of the tax year and meet the income limits are eligible for the credit.

People under age 65 may be eligible if they meet all the following qualifications:

• Retired on total and permanent disability
• Received taxable disability income during the year
• Had not reached mandatory retirement age by the beginning of the year

The credit is only available to U.S. citizens and resident aliens. More information about income limits and eligibility criteria can be found on the IRS website.

How to Apply

To apply for the credit, fill in Schedule R and submit it with your tax return.

Standard Deduction for Seniors

The standard deduction allows you to claim a specific amount rather than itemizing deductions. If this amount is more than your total allowable itemized deductions, it may result in a larger tax refund. A higher standard deduction is available to taxpayers who are aged 65 and older.

Who Is Eligible?

If you’re aged 65 or older at the end of the tax year, you can claim the senior’s standard deduction amount. If you’re younger but your spouse is at least 65 years old, you may also be eligible for the higher standard deduction.

You can’t take the standard deduction if:

• You’re married and file separately from your spouse, and they itemize deductions
• You’re filing for a short tax year
• You’re a nonresident or dual-status alien during the tax year

How to Apply

You can choose whether to claim the standard deduction or itemize your deductions when completing your tax return. You can use Worksheet 4-1 to determine your standard deduction.

Medical and Dental Expenses Deduction

People who itemize their deductions may be able to deduct medical and dental expenses paid for themselves, their spouse and dependents. Such expenses can include the cost of diagnosis, cure, mitigation, treatment or prevention of disease. They can also include payments for treatments that affect the structure or function of the body.

Who Is Eligible?

All taxpayers are eligible to deduct medical and dental expenses on their tax returns. However, your total medical expenses must be more than 7.5% of your adjusted gross income to claim the deduction. Certain expenses don’t qualify for the deduction, including:

• Funeral or burial costs
• Nonprescription medicines
• Toothpastes, toiletries and cosmetics
• Most types of cosmetic surgery
• A trip or program that’s intended to improve your general health

How to Apply

You can use Schedule A to calculate whether you can claim a medical and dental expense deduction when completing your federal tax return. If you choose to claim the deduction, you’ll need to provide proof of your expenses.

Health Insurance, Medical Expense and Drug Cost Assistance

In addition to Medicare and Medicaid, the federal government has programs that can help you pay for medical expenses. The cost of premiums, medications, deductibles and more may be offset or eliminated with these programs.

Medicare Savings Programs

Medicare Savings Programs can help pay your premiums for Medicare Parts A and B. These programs may also pay your deductibles, coinsurance and co-payments. There are four types of Medicare Savings Programs, each with slightly different eligibility requirements and benefits:

• Qualified Medicare Beneficiary (QMB) Program. Helps pay for Part A and B premiums, deductibles, coinsurance and co-pays.
• Specified Low-Income Medicare Beneficiary (SLMB) Program. Assists with Part B premiums.
• Qualifying Individual (QI) Program. Helps pay Part B premiums.
• Qualified Disabled Working Individual (QDWI) Program. Helps pay Part A premiums.

Who Is Eligible?

Eligibility for each program is based on an applicant’s income, resources and circumstances. The limits differ depending on the program and your state, with Hawaii and Alaska having higher limits. There are a limited number of participants accepted in the QI program, and states approve applications on a first-come, first-served basis. To be eligible for the QDWI program, you must also be working, have a disability and no longer qualify for disability benefits and premium-free Medicare Part A because you returned to work.

How to Apply

Medicare Savings Programs aren’t part of Medicaid, but they’re administered through the Medicaid offices in each state. To apply, contact your state’s Medicaid office.

Extra Help Program

The Extra Help program helps people with limited income pay for Medicare drug coverage (Part D), including premiums, deductibles, coinsurance and other costs. It’s also called the Medicare Part D Low Income Subsidy.

There are two levels of Extra Help. Full Extra Help pays all premiums and deductibles and limits the cost of prescription medicines to $3.95 for generic and $9.85 for brand-name drugs. Once the total drug costs paid by you and your plan reach $7,050 for the year, you pay nothing for prescription medications.

As a beneficiary of Partial Extra Help, you’ll pay a premium based on your income. You’ll also pay a maximum deductible of $99 and no more than 15 percent of the cost of each covered prescription drug. Once the total drug costs paid by you and your plan reach $7,050 for the year, your prescription costs drop to $3.95 for generic and $9.85 for brand-name medications.

Who Is Eligible?

To qualify, applicants must have income and resources below the current program limits, which increase each year. For 2022, the limits are:

• An income of $20,385 and resources of $15,510 for an individual
• A total income of $27,465 and resources of $30,950 for a married couple

Once you’re approved for Extra Help, you receive it for the rest of the calendar year, even if your income changes.

How to Apply

You’re automatically enrolled in the Extra Help program if you:

• Have full Medicaid coverage
• Are enrolled in a Medicare Savings Program that helps pay your Part B premiums
• Receive Supplemental Security Income from Social Security

If you’re automatically enrolled, you’ll receive a letter about Extra Help, including information about any payments and the drug plan you’re enrolled in.

If you’re not enrolled automatically, you can apply for Extra Help online through the SSA website or by calling Social Security at 800-772-1213.

BenefitsCheckUp

Operated by the National Council on Aging, BenefitsCheckUp is a comprehensive online tool that connects seniors with benefits programs they qualify for. Through the site, you can find federal, state and local programs to help you pay for health care, food, medicine, utilities and other expenses.

Who Is Eligible?

The programs listed on the BenefitsCheckUp site are specifically aimed at people aged 65 and over and those with disabilities. The listing for each program includes detailed information on its eligibility criteria.

How to Apply

Enter your ZIP code on the BenefitsCheckUp homepage to search for programs that meet your needs. Then, follow the instructions on how to apply found in the individual program listing. Depending on your location, you may also be able to connect with a Benefits Enrollment Center counselor who can help you identify and apply for available programs.

Nutrition Assistance Programs

Nutrition assistance programs help seniors obtain groceries. They may also provide prepared meals through home delivery or in group settings.

Supplemental Nutrition Assistance Program (SNAP)

The Supplemental Nutrition Assistance Program (SNAP) provides benefits to help low-income households purchase healthy foods. Participants receive an Electronic Benefits Transfer (EBT) card, and benefits are loaded automatically each month. This card can be used like a debit card at authorized food stores and retailers.

Your EBT card can only be used to purchase grocery items. SNAP benefits can’t be used to buy alcohol, tobacco, vitamins, medicines, food that’s hot at the point of sale and nonfood items such as pet food and cleaning supplies. However, with SNAP benefits helping pay for food, you’ll have more discretionary funds available for your other needs.

Who Is Eligible?

Applicants must meet income and resource limits to be eligible for SNAP benefits. Limits are higher for households with at least one member who’s aged 60 and older or disabled. Certain assets aren’t considered as resources, including most retirement and pension plans.

For households with a senior member, the 2022 resource limit is $3,750. Income limits depend on your household size and are higher in Alaska and Hawaii. SNAP has gross and net monthly income limits. Your net income is your gross income minus allowable deductions. Households with a senior member only need to meet the net monthly income limit, which is $1,074 for an individual and $1,452 for a couple.

How to Apply

SNAP applications are managed by state agencies. Contact your local agency for information on how to apply.

The Emergency Food Assistance Program (TEFAP)

The Emergency Food Assistance Program (TEFAP) supplements the diets of low-income residents by supplying free emergency food items. The U.S. Department of Agriculture purchases nutritious foods and provides them to states for distribution to local agencies.

Much of this goes to food banks, however it can also go to organizations that serve the public, such as soup kitchens and food pantries.

Who Is Eligible?

Because TEFAP resources are distributed to states and local organizations, eligibility requirements can differ. To receive items from food pantries in most locales, you usually have to meet the state’s income limits. Eligibility in some states may depend on whether you receive other income-based benefits.

How to Apply

Contact your state’s distributing agency to find out how to apply and where TEFAP foods are available in your local area.

Seniors Farmers’ Market Nutrition Program (SFMNP)

The Senior Farmers’ Market Nutrition Program (SFMNP) helps seniors access locally grown fruits, vegetables, honey and herbs. It also helps local farmers and aids in developing new outlets for the sale of local produce.

Coupons or checks are provided to participants. These can be redeemed for eligible items from authorized farmers, farmers’ markets, roadside stands and community-supported agriculture (CSA) programs.

Who Is Eligible?

The program is available to people aged 60 and older who meet the income guidelines. Currently, the income limit is 185% of the federal poverty level. Some states accept participation in another income-based benefit program, such as SNAP, as proof of eligibility.

How to Apply

SFMNP is administered by individual states. Contact your local state or tribal agency for information on how to apply for benefits and where coupons can be redeemed in your area.

Meals on Wheels

Meals on Wheels America delivers meals to homebound seniors and people with disabilities. The national organization represents more than 5,000 local groups across the country.

Each delivered meal meets one-third of a senior’s daily caloric requirements. Volunteers who deliver the meals also ensure that seniors receive social contact and a regular check-in. Some Meals on Wheels groups have other resources available, such as pet food deliveries and congregate meals.

Who Is Eligible?

Each local group operates as a separate entity, so eligibility requirements may vary slightly. In general, people aged 60 and older who have difficulty shopping for food, preparing meals and socializing with others are eligible for the program. Seniors who are still mobile are encouraged to join congregate meals available at senior centers and senior cafes.

There’s no income limit to qualify for the service, however some seniors may be asked to contribute toward the cost of meals. This depends on an individual’s circumstances, and any fees are calculated on a sliding scale.

How to Apply

Call your closest Meals on Wheels group and a team member can help guide you through the application process. You can search for your local provider on the national Meals on Wheels site.

Job Assistance Programs

For active seniors, a part-time job may be the ideal way to bring in extra money. Working part-time can not only help you combat inflation, but it could also provide socialization opportunities, help you maintain your mental well-being and keep you feeling young.

Senior Community Service Employment Program (SCSEP)

The Senior Community Service Employment Program (SCSEP) is a job training program for older adults. Participants are employed at nonprofit and public facilities, including schools, hospitals and senior centers. The program allows participating organizations to gain needed assistance and helps seniors enhance their skills, so they can transition to unsubsidized employment.

Participants work an average of 20 hours a week and are paid the highest of the federal, state or local minimum wage rate.

Who Is Eligible?

The program is available to people aged 55 and older who are unemployed and have a family income at or below 125% of the federal poverty level. Participation may be limited, and priority is given to:

• Veterans and their spouses
• Seniors aged 65 and older
• Individuals with a disability
• Those with low literacy or English proficiency
• Rural residents
• Homeless people or those at risk of homelessness
• Individuals with low employment prospects
• People who’ve failed to find employment through other means

How to Apply

To learn about available SCSEP programs in your area, search CareerOneStop’s Older Worker Program Finder or call 877-872-5627.

State-by-State Financial Assistance for Seniors

Individual states also have a wide range of financial resources available to assist seniors and low-income residents. The following state guides include information about programs that offer cash assistance, medical equipment, health insurance and food assistance. You can search for available resources in your area, find details about program eligibility guidelines, and take the next steps to get help.

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