Philadelphia, Pennsylvania Tiered Assistance Program
The City of Philadelphia, Pennsylvania created the Tiered Assistance Program (TAP) in 2017 in order to address water affordability for low income communities. In Philadelphia, water affordability is an issue that affects a large number of families - between April 2012 and January 2018, 40% of households either had unpaid bills or some other sort of water debt. To address this issue, the Philadelphia Water Department implemented TAP, a program that allows customers to pay water bills at a percent of their income - this payment is capped at 3%. Through this program’s fixed rates, Philadelphians who are struggling to pay their water bill can budget more accurately and access more affordable water, which is predicted to result in increased payment rates and reduced water debts.
The TAP program expanded upon Philadelphia’s prior income assistance program by easing the financial burdens on low income customers, seniors and customers with special hardships to help reduce monthly water bills. The income based rate structure for TAP is derived from United Nations guidance that people should pay no more than 3% of their income for water for domestic uses (drinking, sanitation, food preparation, clothes washing etc.).1 Water bills are capped at:
- 2% of income for residents earning less than 50% of the Federal Poverty Level;
- 2.5% for residents earning 51 to 100% of the poverty level; and
- 3% for those earning 101 to 150% of the poverty level.2
Through this program, residents also receive free leak detection tests and water efficient appliances. Customers do not have to be behind on their monthly water bills in order to be eligible for the program, and can even get outstanding balances forgiven after two years in the program.
About one-fourth of Philadelphians and two out five children come from families at or below the poverty level, with three fifths of those in poverty being African-Americans. The assistance program works to provide disadvantaged residents of Philadelphia with affordable water through its use of percent of income payment program (PIPP). Through PIPP, residents pay a fixed rate based on their income, resulting in more consistent bills and reducing over-and-underpayment. Prior to TAP, water bills for low-income Philadelphians earning less than $30,000 per year ranged from 3.25% to over 8% of monthly income. Under TAP, however, water bills for designated residents are capped at 3% of their income. As a result, bills are not just more consistent - they are also more affordable for residents. Seniors are also eligible for additional discounts.
The program is also easily accessible. Only one application is required, and residents can apply for TAP by mail, online, and in-person. Customers that are struggling to fill out an application can seek assistance from several organizations that have partnered with the Philadelphia Water Department, such as Community Legal Services, Energy Coordinating Agency, Utility Emergency Services Fund, and Neighborhood Energy Centers. Additionally, customers are not responsible for determining which income bracket they fall under, as trained representatives will do so.
This program is funded by rate increases on municipal water ratepayers not enrolled in TAP. Philadelphia Water budgeted $18 million for the Tiered Assistance Program in FY 2018. As the program is relatively new, it remains to be seen what the actual cost of implementation will be. However, it is expected that as the number of shut offs decrease, operational costs will decrease as well.
Publication Date: 2017
- City of Philadelphia, Pennsylvania
- Case study
1. UN Water. https://www.un.org/waterforlifedecade/human_right_to_water.shtml
2. “Water Affordability Based on Income: The Tiered Assistance Program in Philadelphia” http://graham.umich.edu/media/pubs/Water-CS-Philidelphia-Tiered-Assistant-Program_0.pdf