Are municipalities permitted to use ARP funds to pay for death services? If yes, what restrictions are there?

Municipalities may be permitted to use funds received from the Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) to pay for death services incurred by households. The American Rescue Plan Act of 2021 (“ARP”) allows municipalities to use CSLFRF funds “to respond to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19) or its negative economic impacts, including assistance to households.”[1] However, guidance from the U.S. Department of the Treasury (“Treasury”) does not provide specific restrictions regarding the issue of death services. Municipalities must adhere to basic program considerations when expending funds for eligible projects.

Treasury’s Final Rule on CSLFRF contains a non-exhaustive list of programs or services that provide assistance to households and may be funded in response to COVID-19 or the negative economic impacts of the public health emergency. This list specifically mentions “emergency assistance for burials” as an eligible use of CSLFRF funds.[2] A municipality could potentially interpret this language as covering death services, but should first consult with licensed legal and accounting professionals to minimize the risk that the government will claw back funds.  More specifically, the Final Rule also lists “benefits for the surviving family members of individuals who have died from COVID-19, including cash assistance to surviving spouses or dependents of individuals who died of COVID-19” as an enumerated eligible use, without any specific intended use of funds listed.[3]

When determining what may be eligible under “addressing negative economic impacts” use of funds, “the recipient should assess whether, and the extent to which, there has been an economic harm, such as loss of earnings or revenue, that resulted from the COVID–19 public health emergency.”[4], [5] The need for burial services for a person who passed away due to COVID-19 would likely fit in the category of being an unexpected negative economic impact to a household.

Households are presumed to be ‘impacted,’ and thus eligible for assistance to households, if:

• They are low- or-moderate income households (defined as at or below 300% of federal poverty guidelines or 65% of county area median income, given the size of the household);
• They are located within a Qualified Census Tract;
• They receive services provided by tribal governments;
• They have experienced unemployment or increased food or housing insecurity; or,
• They qualify for the Children’s Health Insurance Program, Childcare Subsidies through the Child Care Development Fund (CCDF) Program, Medicaid, or other federal programs.[6], [7]

Treasury guidance does not lay out restrictions when it comes to paying for death services or other household assistance; however, as noted above, Treasury requires a recipient to consider whether, and the extent to which, the household has experienced a negative economic impact from the pandemic. If, for example, a household has experienced a COVID-19 related death, and burial services are needed, this would arguably constitute a negative economic impact from the pandemic and, as such, related costs could be covered. As in all cases where Treasury guidance does not provide express, definitive language identifying a potential use of CSLFRF funds as eligible, municipalities should consult with licensed, certified legal and accounting professionals prior to obligating CSLFRF funds.

Last Updated: March 31, 2022.