Most people know that financial hardship programs exist, but far fewer know that certain bills have legal reduction mechanisms built directly into federal or state law. These are not discretionary programs that run out of funding or close when the budget is exhausted. They are legally mandated structures that require service providers to reduce what they charge low-income households under specific circumstances. The five bill categories below all have these mechanisms in place, and most eligible households are not using them.

1. Electric and Gas Bills Through Percentage of Income Payment Plans

Percentage of Income Payment Plans (PIPPs) are state-level programs that cap a household’s monthly energy bill at a fixed percentage of their gross income regardless of actual usage. Ohio, Pennsylvania, and Illinois have the most established PIPP structures in the country, but over a dozen states have some form of income-based payment cap for utility customers. Under a PIPP, a household earning $2,000 per month might pay a maximum of $100 toward their electric bill even if the actual usage would normally produce a $280 charge. The difference between the capped payment and the actual bill is either absorbed by the utility, subsidized through a state fund, or credited against the household’s balance over time depending on how the specific state program is structured.

Enrollment is not automatic. You have to apply through your utility company or your state’s energy assistance agency. The National Energy Assistance Directors Association (NEADA) tracks which states currently operate PIPP programs and what income thresholds apply in each one. If your state has a PIPP and you are paying your full utility bill each month, you are almost certainly paying more than the law requires you to pay.

2. Phone and Internet Bills Through the Lifeline Program

The Lifeline program is a federal program administered by the Federal Communications Commission (FCC) that provides a monthly discount on phone and internet service for qualifying low-income households. The standard monthly benefit is $9.25 per month. For households on tribal lands, the enhanced benefit is $34.25 per month. Eligibility is tied to participation in qualifying government programs including SNAP, Medicaid, SSI, Federal Public Housing Assistance, and Veterans Pension and Survivors Benefit, or to household income at or below 135% of the federal poverty level.

The legal reduction here is significant because it is a federal entitlement applied directly to your monthly bill. Participating carriers, of which there are hundreds across the country, are required to apply the discount to eligible enrolled customers. A qualifying household that is not enrolled in Lifeline is paying more than federal law says they should pay for their phone or internet service. The Lifeline program portal handles eligibility verification and enrollment directly.

3. Medical Bills Through the ACA Nonprofit Hospital Financial Assistance Requirement

The Affordable Care Act created a legal requirement that every nonprofit hospital in the United States must have a written financial assistance policy covering patients who cannot afford their bills. This is codified in Section 501(r) of the Internal Revenue Code, which ties hospital tax-exempt status to compliance with the financial assistance requirement. Hospitals that fail to maintain compliant financial assistance policies risk losing their nonprofit status.

Under this legal framework, a patient at a nonprofit hospital who meets the hospital’s income threshold is entitled to a reduced or eliminated bill. The hospital cannot charge a financial assistance-eligible patient more than the amounts generally billed to insured patients. This limitation on charges is a legally enforceable protection, not a discretionary courtesy. The IRS guidance on Section 501(r) is the authoritative source for what hospitals are required to provide. Requesting the financial assistance application by name at any nonprofit hospital is how you access this legal protection.

4. Water Bills Through the Low Income Household Water Assistance Program

The Low Income Household Water Assistance Program (LIHWAP) is a federal program created to help low-income households afford drinking water and wastewater services. Unlike LIHEAP, which has operated for decades, LIHWAP is a newer program and not yet fully deployed in every state. States that have implemented it are required to provide assistance to qualifying households based on income, household size, and water bill burden. The assistance is paid directly to the water utility on the household’s behalf.

Beyond LIHWAP, several states have enacted laws requiring water utilities to offer low-income rate structures or arrearage management programs to customers who cannot afford their bills. California’s Water Rate Assistance Program and Illinois’s low-income water rate programs are examples of state-level legal mandates that reduce water bills for qualifying customers. Your state’s public utilities commission website is where to confirm whether an income-based water rate structure is legally available in your area.

5. Student Loan Payments Through Income-Driven Repayment Plans

Federal student loan borrowers have a legal right under the Higher Education Act to enroll in income-driven repayment (IDR) plans that cap monthly payments at a percentage of their discretionary income. This is not a forgiveness program and it is not discretionary on the part of the loan servicer. It is a legally mandated option that every federal student loan servicer is required to offer to eligible borrowers. The current IDR plans include Income-Based Repayment (IBR), Pay As You Earn (PAYE), and the Saving on a Valuable Education (SAVE) plan, each with slightly different payment calculations and eligibility rules.

Under the most favorable current plan, a borrower whose income falls below a specified threshold can have their monthly payment reduced to zero legally and without penalty. Borrowers who are currently paying a standard repayment amount but whose income qualifies them for a lower IDR payment are paying more than the law requires them to pay. Enrollment is handled through the Federal Student Aid income-driven repayment portal and typically takes under 30 minutes to complete online. Understanding your full range of income-based bill caps across all five of these bill categories simultaneously can reduce a household’s total monthly obligations by hundreds of dollars using legal mechanisms that already exist and require only an application to access.