Living on a low income and can’t afford a cell phone? There are a few options available to receive a free cell phone with low-cost “Lifeline” pay-as-you-go plans, and it’s becoming a big business, with full-page newspaper and internet ads touting one brand or another. (In fact with SafeLink using Google ads, it is quite possible that you, dear reader, will find a SafeLink ad on this very blog post!) Why so much marketing money being spent on a what seems like it should be a loss-leader business?

Lifeline cellphone programs are funded by the Universal Service Fund (USF), a fund created by the FCC to help low-income consumers get connected. All phone companies must contribute to this fund; their “contributions” largely come from Universal Service Fees, which they charge telephone consumers on our monthly phone bills. The Universal Service Administrative Company (USAC) reimburses the phone companies around $10 a month for each Lifeline customer.

We asked Lambert Rochfort, Program Manager for Seattle Community Voice Mail (CVM) and an expert on telecommunications access issues, to evaluate the two main plans available in  Washington, Assurance Wireless and SafeLink Wireless. Here’s what he had to say (the bulk of this originally appeared on the Seattle/King County Community Voice Mail blog earlier this year.)

If you or someone you know would like to get a low-cost, pay-as-you-go cell phone, I want to let you know about the two Lifeline prepaid cellphone programs currently available, Assurance Wireless and SafeLink Wireless. SafeLink (from Tracfone) and Assurance (from Virgin Mobile) both offer a free phone, up to 250 free minutes every month, plus free voice mail, caller ID and call waiting. SafeLink also offers two other options: 125 minutes that carry over to the next month or 68 international minutes (that also carry over monthly). These programs do not require a contract, monthly bills, or a credit check.

There are also Lifeline plans (contracts) offered by AT&T and Sprint, which we do not recommend because they require a one- or two-year contract, they are more expensive than prepaid programs, and require a credit check. They also don’t offer many minutes and have limited coverage areas, charge overage fees for additional minutes, as well as roaming fees for using the phone out of the coverage area. These overage and roaming fees have caused many low-income people to get into major debt with the phone companies.

With either Assurance or SafeLink, during the first few days of each month, your monthly allotment of free minutes will be added to your phone. If you use all your free minutes before the end of the month, you will need to buy additional minutes, which can be purchased online, by phone and at retail stores on top-up cards. SafeLink charges 10¢ for each additional minute in Washington (which is $25 for 250 minutes), while Assurance offers either 250 extra minutes for $5 or 750 extra minutes and 1,000 text messages for $20. Prepaid mobile minutes are taxed at a rate of 11%.

Note that to apply for a Lifeline phone, you must provide a unique physical mailing address; they will not send a phone to an address that has already received one, and they will not send a phone to P.O. boxes or commercial addresses. So, you will not be eligible if you live in a shelter or other group housing situation where each resident doesn’t have their own unique address, or if you live in a car or on the street. Although, many people who are homeless or live in group housing use a friend’s or family member’s address on their application, and the phone companies actually encourage this.

To be eligible for either Lifeline program, you must either receive DSHS benefits or your income must be below 135% of poverty level. The eligible benefits are:

• Food Stamps (SNAP)
• Medical Assistance
• Supplemental Security Income (SSI)
• Disability Lifeline (General Assistance)
• Temporary Assistance for Needy Families (TANF)
• State Family Assistance (SFA)
• DSHS Chore Services
• Refugee Assistance
• Community Options Program Entry System (COPES)

SafeLink and Assurance both require a DSHS client ID and last 4 digits of your social security number to qualify based on program participation.  To apply based on income, your gross monthly income must be below these guidelines:

1-person household: $ 1,218
2-person household: $ 1,639
3-person household: $ 2,060
4-person household: $ 2,481
5-person household: $ 2,901
6-person household: $ 3,322
7-person household: $ 3,743
8-person household: $ 4,164
Each additional person: + $ 421

To qualify on income, you will need to mail them documentation of your income, such as a federal or state tax return, current income statement or W-2 form from an employer, three consecutive months of current pay stubs, Social Security statement of benefits, retirement or pension benefits statement, unemployment or Workers Comp statement of benefits, or other legal documentation that shows income.

Based on Community Voice Mail’s (CVM) analysis, Assurance Wireless is the best deal overall for Lifeline cell phones right now.

To apply for Assurance Wireless, call 1.800.395.2108 or print and mail their application from their website assurancewireless.com.