How Lifeline Works
Lifeline is a federal program that gives qualifying low-income U.S. households a monthly subsidy toward phone or broadband service. The subsidy is $9.25 per month ($34.25 on Tribal lands). When that subsidy is applied at participating wireless carriers, it covers the entire monthly cost of a basic plan — meaning a qualifying household pays nothing for monthly service, no contract, no recurring bill. This is what people mean when they talk about a "free government phone."
Where the money comes from
Lifeline is funded by the federal Universal Service Fund (USF), which is collected from telecommunications providers as a small percentage of their interstate and international revenues. The USF is administered by USAC, the Universal Service Administrative Company, on behalf of the FCC. USAC decides which carriers can offer Lifeline service, processes recertifications, and runs the National Verifier eligibility system.
How carriers actually receive the subsidy
When you enroll with a Lifeline carrier, the carrier files a monthly claim with USAC for every active subscriber. USAC reimburses the carrier $9.25 per month ($34.25 on Tribal lands) per subscriber. This is why carriers care that you keep using the line — if you go 30 days without activity, the carrier loses the subsidy for that line and is required to de-enroll you.
Why your phone is also free
The federal Lifeline subsidy covers monthly service, not the device. Carriers ship a free smartphone as a competitive sign-up incentive. Because the cost of a low-end Android smartphone has fallen below $50 wholesale, carriers can give one away to a first-time enrollee and still come out ahead over the long-term value of the federal subsidy. This is why every major Lifeline carrier offers a free phone — it's how they compete for your benefit transfer.
What you give up (almost nothing)
Lifeline service is real wireless service on real national networks (Verizon, AT&T, T-Mobile). The data allotment is smaller than a paid plan — usually 5 to 25 GB monthly — but voice and text are unlimited. There is no contract, no credit check, no early-termination fee, and no required upgrade. The only obligation is to use the line at least once every 30 days and to recertify your eligibility once a year. See the recertification guide for that process.
What Lifeline does not cover
Lifeline does not cover home internet service through this same workflow — that was the role of the now-paused Affordable Connectivity Program (ACP). Lifeline does not cover roaming charges in foreign countries, premium services like international calling, or device upgrades after the initial free phone. If you want a newer or higher-end phone, most carriers let you buy one at retail with no impact on your free monthly service.
Quick history
Lifeline began in 1985 under the Reagan administration to subsidize landline service for low-income households. It expanded to cellular in 2008 (the start of "free government phones"), to broadband in 2016, and was reformed in 2021 to require National Verifier eligibility checks. The Affordable Connectivity Program (ACP) launched in 2021 as a separate, much-larger benefit specifically for home broadband; ACP funding was paused in 2024. Lifeline itself remains active.
Who runs the program
The Federal Communications Commission (FCC) writes the rules. USAC (the Universal Service Administrative Company) administers them day-to-day, including the National Verifier and the National Lifeline Accountability Database. State public utility commissions handle a small number of state-specific rules. Wireless carriers handle enrollment and customer service. See the FCC vs USAC explainer for who does what.
Continue reading: browse state-by-state Lifeline guides or compare approved carriers.