Which Income is Counted for Medicaid?
Medicaid Income Eligibility – Quick Facts
Wages, Social Security, pensions, investments, rental income, some VA benefits, and more.
Income is counted differently for single applicants, married couples, and cases with only one applicant spouse.
Most states set LTC Medicaid limit at $2,901/month per applicant; lower limits for Regular Medicaid.
Income can be reduced through Qualified Income Trusts or the Medically Needy “spend down” method.
Applicants must provide income documentation; states may also verify electronically.
How Does Medicaid Decide If You’re Income Eligible?
To qualify for long-term care Medicaid, applicants must meet strict income limits in addition to asset limits. These rules determine which payments and benefits count toward your income, how marital status affects eligibility, and what options exist for those who earn more than the limit.
What Types of Income Does Medicaid Count?
Medicaid includes most earned and unearned income when determining eligibility:
- Employment wages and self-employment earnings
- Social Security retirement or disability benefits
- Pensions and annuities
- Alimony and court-ordered payments
- Dividends, interest, and IRA withdrawals
- Net rental income
- Most Veterans’ benefits (Aid & Attendance is excluded)
- Gifts and inheritances
Some payments are excluded, such as Holocaust restitution and certain VA benefits.
How Is Income Counted for a Single Applicant?
The calculation is straightforward — Medicaid totals all countable monthly income and compares it to the program’s limit. In 2025, most states set this limit at:
- Long-Term Care Medicaid (Nursing Home / HCBS Waivers): $2,901/month ($34,812/year)
- Regular Medicaid (ABD): Typically $967/month or $1,304.17/month, depending on the state
How Does Medicaid Count Income for Married Couples?
When Both Spouses Apply
Many states apply the “name on the check” rule — the income belongs to the spouse whose name is on it. Each spouse may qualify individually with income up to the program limit (often $2,901/month in 2025 for LTC Medicaid).
When Only One Spouse Applies
For Nursing Home Medicaid or HCBS Waivers, only the applicant’s income is considered. The non-applicant spouse’s income is excluded but may receive part of the applicant’s income through the Minimum Monthly Maintenance Needs Allowance (MMMNA) to prevent spousal impoverishment.
For Regular Medicaid (ABD), both spouses’ incomes are combined, even if only one applies.
How Do States Verify Your Income?
Applicants must submit proof, which may include:
- Pay stubs or self-employment records
- Social Security award letters
- Bank statements and dividend checks
- Pension and annuity statements
- VA benefits letters
States may also cross-check using electronic databases.
What If Your Income Exceeds the Limit?
Being over the limit doesn’t automatically mean denial. States offer two main solutions:
- Qualified Income Trust (QIT) / Miller Trust: Moves excess income into a restricted trust that can only be used for specific expenses, like care costs and insurance premiums. Allowed in “income cap” states.
- Medically Needy Pathway: Lets applicants reduce countable income by paying medical bills until they reach the state’s medically needy income limit.
Why Work With a Medicaid Planner?
Income eligibility rules can be complex — especially for married couples or those over the limit. A Certified Medicaid Planner can help structure income, set up trusts, and guide applications to improve the chances of approval.
