If you and your loved ones are struggling to make ends meet lately, you’re not alone. Currently 7.8% of American adults are unemployed and over 4.3 million are on welfare. Perhaps your family is not the welfare type, you find the “hand-outs” to be embarrassing or “too little, too late”.
But government assistance programs reach far and wide and you may be qualified to get a type of help you never knew was out there: free or discounted phone service. The program is called LifeLine. Set up in 1996, LifeLine is a government benefit program that discounts on monthly telephone service for eligible low-income consumers to help ensure they have the opportunities and security that telephone service affords, including being able to connect to jobs, family, and 911 services.
If that monthly phone bill is pushing your family’s financial stability over the edge, you might want to find out if you are eligible for a government phone subsidy. A government subsidy is a grant paid by the government to an enterprise that benefits the public. The government does this with all sorts of enterprises, from agriculture to sustainable energy. The enterprise we’re talking about when we talk about these phone subsidies is the federal Universal Service Fund (USF). Making telephone communication universally available to all Americans is one of the Fund’s many projects. Originally USF created the LifeLine program to help low-income families with monthly landline bills. Over the last few years, however, the program has put more than 12 million wireless feature phones into the hands of low-income Americans. Now more than 75% of phone subsidy customers request cell phone coverage over landline.
Unfortunately, federal rules prohibit eligible low-income consumers from receiving more than one LifeLine service per household. Under their definition, a household is any individual or group of individuals who live together at the same address. But this rule can be worked around. An “economic unit” constitutes all adult individuals contributing to and sharing in the income and expenses of a household. You can demonstrate when initially enrolling in the program that any other LifeLine recipients residing at your residence address are part of a separate household. Through this approach you and your spouse could each get cell phone coverage. Sorry, no coverage for your kids.
Contrary to popular belief, the government is not paying for this phone service. In fact, the government requires most telecommunications companies to pay into the Universal Service Fund, and thus support the LifeLine program. Carriers frequently pass this responsibility on to customers as a monthly surcharge. People with monthly phone bills will see a monthly charge – usually a few dollars – for “Universal Service Fund”.
The fee added to the phone bills looks like a tax to a lot of Americans. Many around the nation are furious about this program, citing government largesse and nicknaming subsidized phones “Obama phones” to front an attack on the President’s welfare policies. This program, however, has little to do with Obama. The idea started way back in 1985 under the Reagan administration as part of a universal access initiative, ensuring every individual could connect with jobs, family and the 911 services. The program was named LifeLine in 1997 when the Universal Service Fund was created by the United States Federal Communications Commission (FCC) to meet Congressional universal services goals as mandated by the Telecommunications Act of 1996.
Eligibility varies from state to state, but generally if you earn less than $14,000 a year you can get a phone subsidy. If you have an income that is at or below 135% of the federal poverty guidelines or if you are eligible for other forms of government assistance like Medicaid or food stamps, you qualify to receive up to $10 per month in phone subsidies. People living on tribal lands may qualify for additional discounts and assistance. The free cell phone minutes again vary from state to state. For example, residents of the District of Columbia are given 55 minutes while those in Louisiana receive 250 minutes.
Now, if you’re eligible to get a subsidized phone, you’re not alone. Currently there are over 28 million adults eligible for these phone subsidies. There are 17 million households signed up for the program where four years ago there were only 7 million. This mass increase is largely because of the recession, but there may be another reason for the huge increase in households signing up for the program: Tracfone Wireless.
Tracfone Wireless appears to be cornering the market in subsidized phone service. Owned by Carlos Slim (the richest man in the world), Tracfone Wireless specializes in providing service for LifeLine customers. Through impeccable advertising Tracfone has skyrocketed above its competitors. The advertisements for Tracfone’s “free phones” attracted millions of people. Tracfone now has over 4 million subscribers in its LifeLine program, called SafeLink, and collected $452 million last year from the program’s subsidies. That’s far more than any other provider (the runners-up, AT&T and Sprint, each collected around $274 million).
If you want to receive a cell phone through Tracfone Wireless, go to the SafeLink to determine your family’s eligibility and whether or not the program is offered in your state.