Is Social Security Considered Income for Medicaid in New York?

Quick answer: Yes. For New York State Medicaid, Social Security retirement, disability (SSDI), and survivor benefits are counted as unearned income. However, Supplemental Security Income (SSI) is treated differently — SSI recipients in New York are categorically (automatically) eligible for Medicaid, and the SSI payment itself is not used to disqualify them. The distinction matters because people frequently confuse SSI with Social Security, even though they are separate programs run under different rules.

Last updated: June 2025. Authored by the attorneys at the Law Offices of Albert Goodwin, PLLC, admitted to practice in New York. Reviewed by Albert Goodwin, Esq.

Countable vs. Non-Countable Income for New York Medicaid

How Social Security Is Counted

When New York determines Medicaid eligibility, the entire Social Security benefit is counted — including any portion that is non-taxable for federal income tax purposes, and the gross amount before any Medicare Part B premium is deducted. Social Security is classified as unearned income. For non-MAGI Medicaid (the aged, blind, and disabled), a $20 monthly unearned-income disregard is applied before the income is measured against the limit.

Why SSI Is Treated Differently (Correcting a Common Confusion)

SSI is a federal needs-based program for people who are aged (65+), blind, or disabled and who have very limited income and resources. Because SSI eligibility already requires a recipient to meet strict income and asset thresholds, New York extends Medicaid to SSI recipients automatically. In New York — a "1634" state — the Social Security Administration determines SSI eligibility and the recipient is enrolled in Medicaid without a separate Medicaid income test (see SSA POMS SI 01715.010). In short: Social Security benefits count as income; SSI does not, because SSI recipients are categorically eligible.

New York Medicaid Income Limits (2024–2025)

New York applies different income rules depending on the Medicaid category:

Non-MAGI Medicaid (aged 65+, blind, or disabled) uses a separate income and asset test. For 2024, the income limit for a single applicant was approximately $1,732/month, and for 2025 it increased to roughly $1,800/month for a household of one, plus the $20 unearned-income disregard. New York significantly expanded these figures in recent years, so the current threshold should always be confirmed against the New York State Department of Health income chart before applying.

MAGI Medicaid (most working-age adults, pregnant individuals, and families) uses Modified Adjusted Gross Income from federal tax returns, has higher income thresholds, and has no asset test. Most people whose primary income is Social Security retirement or SSDI fall into the non-MAGI category and face the stricter limits.

The Spend-Down Calculation — A Worked Example

When income exceeds the non-MAGI limit, the difference is the monthly "excess income" or "spend-down." Here is how the math works using illustrative 2024 figures:

1. Total monthly income: Social Security $1,900 + small pension $300 = $2,200
2. Subtract the $20 unearned-income disregard: $2,200 − $20 = $2,180
3. Subtract the non-MAGI income limit ($1,732): $2,180 − $1,732 = $448
4. The $448 is the monthly excess income that must be addressed for the applicant to qualify.

(These numbers are an example only — they are not a prediction of any individual's actual eligibility or spend-down amount.)

Eliminating the Spend-Down With a Pooled Income Trust

Most New York Community Medicaid applicants with excess income use a pooled income trust, which is authorized under 42 U.S.C. § 1396p(d)(4)(C) and operated by a nonprofit organization. Using the $448 from the example above, the process works like this:

• The applicant signs a joinder agreement to join a nonprofit pooled trust.
• Each month, the applicant deposits the $448 excess income into their sub-account.
• The trust pays the applicant's legitimate living expenses (rent, utilities, food, transportation, insurance) directly from those funds.
• Income deposited into the trust no longer counts toward the Medicaid income limit, so the applicant qualifies while still using the money for their own benefit.

Learn more on our pooled income trust page, and review whether a special needs trust fits your circumstances.

Institutional Medicaid: Different Income Rules

Institutional Medicaid (nursing home care) treats income very differently. The institutionalized individual must contribute nearly all income toward the cost of care, keeping only a small monthly personal needs allowance plus certain allowable deductions; Medicaid pays the difference. For married couples, the community spouse may retain income up to the Minimum Monthly Maintenance Needs Allowance (MMMNA) under New York's spousal impoverishment rules. The pooled-trust strategy generally does not apply to Institutional Medicaid in the same way it does to Community Medicaid.

Veterans Benefits and Medicaid

• VA disability compensation — counted as income.
• VA pension — counted as income.
• VA Aid & Attendance — generally not counted, because it is intended to pay for care Medicaid would otherwise cover.
• Survivor benefits to veterans' families — treatment varies by program.

Veterans with eligibility questions should consult both a Medicaid attorney and a VA-accredited attorney.

Tax Treatment Is Not the Same as Medicaid Treatment

How income is taxed does not predict how Medicaid counts it. A portion of Social Security may be non-taxable for federal income tax, but the entire benefit counts for Medicaid. Tax-free municipal bond interest is generally counted by Medicaid. Do not rely on tax rules to anticipate Medicaid results.

Frequently Asked Questions

Is Social Security considered income for Medicaid in New York?

Yes. Social Security retirement, disability (SSDI), and survivor benefits are counted as unearned income for New York Medicaid.

Does SSI count against Medicaid eligibility?

No. SSI recipients in New York are categorically eligible for Medicaid, and the SSI payment is not used to disqualify them.

What if my Social Security puts me over the income limit?

You may still qualify by depositing the excess income into a pooled income trust under 42 U.S.C. § 1396p(d)(4)(C), or by meeting a spend-down through medical expenses.

Speak With a New York Medicaid Planning Attorney

Medicaid income rules in New York are technical and category-specific, and the figures change annually. Before submitting an application, it is wise to consult a knowledgeable Medicaid planning attorney. The Law Offices of Albert Goodwin, PLLC, are located in Midtown Manhattan, New York, NY. Call 212-233-1233 or email [email protected] to schedule a consultation.

This article is for general information about New York State Medicaid and is not legal advice. For authoritative figures, see the New York State Department of Health and the Social Security Administration (SSA POMS).