Linda @ The Cents of Money
Sometimes you need financial help to cover basic living expenses like housing, utilities, groceries, and health care to get you and your family over the hump. You can apply for free government funding, depending on your circumstances and qualifications. Most government assistance programs are federally funded but run by the states. The recent government shutdown, which was the longest in American history, has ended, but it may take some time for it to get back to normal, and there may be delays.
Getting Free Money From the Government
The government (i.e., federal, state, or local) provides money to people in financial need. Assuming you have a legitimate claim and you’re experiencing financial hardship, you should be able to qualify for government monetary support and assistance.
Some people may feel there is a stigma attached to accepting government assistance despite dire straits. It is not necessarily free money when you have paid your taxes into the system and are experiencing financial circumstances beyond your control.
The federal and state governments provide monetary assistance for basic living needs, including housing, utilities, food, health insurance, and healthcare, and college education.
1. Housing
Having a roof over our heads is essential to feeling safe and secure. Housing accounts for 30% of your gross income, a common rule of thumb. Whether you buy your home for the first time or need rental assistance, federal and state government assistance is available.
The U.S. Department of Housing and Urban Development (HUD) oversees homeownership assistance of state and regional programs. First-time homebuyers and sometimes repeat buyers can get down payment help for mortgages, but the bar is often high for those with low incomes.
Additionally, low-interest loans with zero- or low-down-payment programs are available for those who want to buy a home but earn low incomes or have low credit scores. Government-backed programs with varying eligibility are:
- Veteran Administration (V.A.) loans
- Federal Housing Agency (FHA) loans
- The Rural Development Program helps farms with USDA loans, foreclosures, and renters
- HomeReady and HomePossible
HUD also supports reverse mortgages for homeowners 62 or older to tap the household equity of their home and oversees FHA. Through an FHA-approved lender, households can apply for a Home Equity Conversion Mortgage (HECM), the only insured reverse mortgage by the U.S. Federal Government.
Through the Treasury Department Emergency Rental Assistance (ERA), renters at risk of eviction can apply through local programs that may cover rent, utilities, home energy, water and sewer, and trash removal. Depending on the local program, renters may get help with reasonable late fees and home internet service. They may receive funding support for moving-related costs, such as a security deposit.
Separately, Section 8 is a voucher program that provides rental assistance to private landlords for low-income households in the U.S.
2. Utilities
Along with having shelter, households need critical utilities to remain healthy and safe, but can struggle to pay for them, such as heat and lighting. Access to utilities such as gas and electricity, telecommunications and Internet, water, and sewer services is vital. Fortunately, a few government-funded utility assistance programs, in addition to those above, are available to help those in need.
- Low-Income Home Energy Assistance Program (LIHEAP) assists families with home energy bills, crisis assistance, weatherization, and minor energy-related repairs. Consumers with state grants can apply through the respective state’s maximum income limits. The recent government shutdown coincided with colder temperatures, and funding for the $4.1 billion Low-Income Home Energy Assistance Program was halted, prompting some states to delay heating bill payments.
- The Lifeline Program is a Federal Communications Commission (FCC) program that provides low-income consumers essential communications services, including home, mobile phone, and broadband Internet. The FCC supports the 2021 Affordable Connectivity Program (ACP) to extend discounts on broadband services and connected devices.
- The local utility company may help you with a temporary financial problem, especially if you regularly pay your bills.
3. Foods and Groceries
Everyone has food-related needs as basic necessities, but it can be challenging for those under financial stress. For families who need help with groceries and nutrition, there are government-based programs that can support low-income:
The Supplemental Nutrition Assistance Program (SNAP), formerly the Food Stamps program, is a federal program that provides food purchasing assistance to low-income households, accounting for 9.2% of households. It is administered by the USDA, with benefits dispersed by states throughout the U.S. SNAP benefits are distributed based on household size, income, and expenses via a specialized debit card system called Electronic Benefit Transfer (EBT). Those eligible may use EBT to purchase healthy food and nonalcoholic beverages at most supermarkets, convenience stores, retailers, and specific farmers’ markets, as well as at authorized restaurants that serve affordable meals to the elderly, homeless, or disabled.
The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) is associated with the USDA. WIC provides federal grants to states for supplemental nutritious foods and nutrition education for those in need who are at nutritional risk. USDA also provides meals through the Summer Food Service Program (SFSP) for children 18 years and younger who are out of school.
4. Health Care
Getting health insurance for individuals and families is essential in our society, and health costs are rising significantly. Several healthcare programs on Healthcare.gov (the Marketplace) offer free or low-cost coverage to low-income people, older people, and people with disabilities. Medical care costs keep rising, and many need financial help.
Medicaid & the Children’s Health Insurance Program (CHIP) provide free or low-cost health coverage for families and children. Some states’ Medicaid programs have expanded to cover people below income levels. You can apply through the Marketplace for either Medicaid or CHIP or directly to your state Medicaid agency, which follows federal guidelines. You may qualify for CHIP if your income disqualifies you from Medicaid. Medicare coverage is for people 65 or older who qualify due to illness or disability.
Advance Premium Tax Credit (APTC) is available for health insurance through the Marketplace. This program allows you to use the credits the government sends to your health insurance company to lower your monthly bills. Alternatively, you can use your tax refunds to lower payments if you don’t have tax credits.
Affordable Care Act (ACA) is a federal program that enables people who qualify for low to moderate-income limits to afford an affordable health insurance plan. In addition to expanding Medicaid to low-income individuals and families, individuals and small businesses can access the health insurance marketplaces to shop and compare plans. ACA has protected consumers with pre-existing conditions and coverage for young adults. However, subsidies are scheduled to expire at the end of 2025, potentially leaving lower- and middle-income families worse off next year. This has been among the biggest issues during the shutdown, but it was left open for Congress to revisit this issue soon to avoid much higher prices.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal program that applies to most private-sector businesses with 20 or more employees. COBRA provides a bridge for terminated employees or for those whose reduced hours disqualify them. It requires an employer’s group health insurance to continue for a limited time after qualifying life events, including death, divorce, or legal separation from a covered employer for a spouse or children.
5. Disabled Adults and Children
There are two federal disability income programs, Social Security Disability Income (SSDI) and Supplementary Security Income (SSI), that help adults and children. The SSDI program is for adults who have worked but are unable to work now due to a disability. The SSI program is geared toward disabled adults, including the aged and blind, and children with limited income and resources, and will provide cash to meet their basic living needs.
6. V.A. Aid and Attendance
Those who served in the military and are eligible for or receive a V.A. pension can qualify for health benefits or monthly payments. They must meet at least one additional requirement, such as needing help with daily activities, being unable to stay in bed or in a nursing home due to a disability, or having limited eyesight.
7. Cash Assistance for Families and Children
When families are financially strained after experiencing hardship, they may receive cash assistance to help pay for basic necessities, including food, housing, home energy, child care, and job training.
The Temporary Assistance for Needy Families (TANF) is funded federally by the Administration of Children and Families (ACF). States run it to help low-income people get through the crisis temporarily. Each state will issue TANF benefits electronically, either on a debit card or by direct deposit.
The Child Care and Development Fund helps low-income families with child care so that they can work, train, or attend school.
8. Education for College Students
Getting a college education is expensive, but there are resources to pursue it. If you have children attending college, file the Free Application for Federal Student Aid (FAFSA) to apply for federal student loans. However, FAFSA is not just for federal student loans; you can also get free government money through grants or scholarships, and these are typically not loans you need to pay back. These financial packages are called gift aid. They are:
- Federal Pell Grants are for undergraduate students with exceptional financial need, as long as they are without a bachelor’s, graduate, or professional degree.
- The Federal Supplemental Educational Opportunity Grant (FSEOG). Each participating college’s financial aid office determines grants. Students receive money grants based on students with the most financial need and the availability of funds at the school.
- The Teacher Education Assistance for College and Higher Education Grant (TEACH) requires the recipient to complete a teaching service obligation as a condition for the grant. If incomplete, it turns into a loan.
- The U.S. Department provides scholarships for various educational categories on its scholarship search tool.
9. Unclaimed Funds
Unclaimed money or property occurs when a business, financial institution, or government owes you money you have not collected. You can file to recover money owed to you or a deceased relative if you claim to be a legal heir, provided you present specific documents. It is common to find unclaimed money left behind by a loved one, family member, or yourself.
Do a free online search for unclaimed property in your name or a family member’s name on the National Association of Unclaimed Property Administrations (NAUPA). Each state you reside in has its own searchable database for unclaimed money.
Typically, unclaimed property is turned over to the state after a year or more of inactivity. People sometimes forget where they keep their money, get older, and forget about leaving money behind. They have moved away, gotten ill, or bank and investment accounts, safe deposit accounts, payments from insurance policies, dividends and interest income, financial securities, uncashed paychecks, and security deposits left with landlords.
10. Lost Retirement Benefits
According to a May 2023 study, Americans have left approximately $1.65 trillion in assets in forgotten 401K accounts. How can people lose these retirement benefits? It may be because you switched jobs during your lifetime and assumed that your retirement benefits from a previous employer traveled with you to your next job.
Many times, retirement accounts stay behind unless you make provisions to move your pension or 401K accounts. If you leave it at your previous job, the company may go out of business, change its name, or merge with another company. Tracking your government pension or 401(k) plan from years ago takes time. These resources are more like found money than free money; you’ll be happy to find your nest egg.
The first place to look is your company’s HR department at the last place you worked. Check these resources:
- US DOL Abandoned Plans
- Pension Benefit Guaranty Corporation trusted plan search to find missing pensions.
- National Registry of Unclaimed Retirement Benefits
Avoid Scams
Unfortunately, various financial scams may appear when seeking financial help. The government wants to help people with legitimate financial needs, but it will only contact you to offer free money or grants through an application process administered by state agencies. If you believe someone is scamming you, contact the Federal Trade Commission (FTC) and report it.