Does Medicaid Difficulty of Care income affect Social Security survivor benefits earnings limit?

This is an excellent question about a complex situation. The earnings limit for survivor benefits in 2025 for someone under FRA is $22,320 annually (or $1,860 monthly). The good news is that Difficulty of Care payments that are excluded from income taxes under IRC Section 131 generally do NOT count toward the Social Security earnings test limit. These payments are considered qualified Medicaid waiver payments rather than wages or self-employment income for this purpose. Your sister should keep documentation from her Medicaid program confirming these are Difficulty of Care payments, just to be safe.

my mom had same situation back in 2020, the medicade payments didnt count for the earnings test but make sure your sister keeps ALL the paperwork they give her!! my mom almost had big problems when ssa wanted proof later

I think the previous replies have good information but I want to add something important - this is one of those situations where it's probably worth your sister's time to actually speak directly with an SSA representative to get this confirmed for her specific case. They can make a note in her file that these payments were reviewed and determined not to count toward the earnings test. It's VERY difficult to get through to SSA on the phone these days though - I recently discovered a service called Claimyr that can help with that. You can check them out at claimyr.com - they basically wait on hold with SSA for you and call you when an agent comes on the line. There's a demo video at https://youtu.be/Z-BRbJw3puU that shows how it works. I used it when dealing with my own survivor benefits questions and it saved me literally hours of hold time.

just wondering, does your sister live in the same house with her son? i think that matters for the difficulty of care payment rules, but not sure if it affects how SS looks at it

THIS IS EXACTLY WHY THE SYSTEM IS SO FRUSTRATING!!!! All these complicated rules and no clear answers anywhere on SSA website. I had to figure it all out myself when my husband died. Called SSA 9 TIMES and got 4 DIFFERENT answers about income limits. They should make this clearer for people already dealing with grief!!!!!!

i forgot to mention my cousin gets SSI not survivors benefits and for SSI they DO count those payments against you. so make sure your situation is different.

I really appreciate everyone's replies. I just talked to my sister and she's going to try to get through to SSA to get something in writing. She said her Medicaid case manager also offered to provide a letter specifically stating these are Difficulty of Care payments under Section 131. It sounds like keeping good documentation is the key here. Thank you all for helping during this difficult time.

I'm so sorry for your sister's loss. This is indeed a complex situation, but I want to reinforce what others have said - you're on the right track getting documentation from both sides. One thing I'd add is that when she calls SSA (or uses that Claimyr service someone mentioned), she should specifically ask them to reference POMS DI 10505.010 which covers the earnings test exclusions. This is the internal SSA manual section that addresses Medicaid waiver payments like Difficulty of Care. Having that specific reference might help the representative give her a more definitive answer and ensure proper documentation in her file. Also, since she's caring for an adult disabled child, she may want to ask about potential auxiliary benefits on her late husband's record for their son if he hasn't already been evaluated for that.

I'm dealing with a similar situation with my elderly mother who receives both Social Security retirement benefits and Medicaid payments for caring for my disabled brother. One thing I learned that might help your sister is to also check if her state has any additional protections or clarifications about these payments. Some states have issued their own guidance to help people understand how Medicaid waiver payments interact with federal benefits. Also, since she's caring for an adult disabled child, she might want to look into whether there are any caregiver support programs in your area that could provide additional resources or respite care. The stress of managing all these different benefit programs while grieving is enormous, and having extra support can make a real difference. I hope she's able to get the documentation she needs from both SSA and Medicaid without too much hassle.

I'm really glad to see this discussion - it shows how important it is for people in similar situations to share their experiences. As someone who works in disability advocacy, I want to emphasize a couple of additional points that might help your sister. First, while everyone's advice about documentation is spot-on, she should also keep a simple log of her caregiving activities and hours. This isn't required for the Social Security earnings test, but it can be helpful if questions ever arise about the legitimacy of the Difficulty of Care payments. Second, she might want to connect with her local Area Agency on Aging or Independent Living Center - they often have benefits counselors who specialize in exactly these kinds of complex situations where multiple programs intersect. They can provide free advocacy and help navigate any future issues that might come up. Finally, I'd suggest she consider joining a caregiver support group if possible. The emotional and practical support from others who understand the challenges of caring for a disabled adult child while managing survivor benefits can be invaluable during this difficult time.

I'm new to this community but wanted to share something that might help. My aunt went through almost exactly this situation about 18 months ago when my uncle passed. She was also receiving Difficulty of Care payments through Medicaid for my cousin who has Down syndrome. What really saved her stress was proactively requesting what SSA calls a "formal earnings determination" - it's different from just calling and asking. You have to submit a written request (can be done online through your my Social Security account) asking them to formally review and document how specific income sources affect your benefits. It took about 8 weeks, but she got an official letter stating that her Medicaid waiver payments were excluded from the earnings test. Having that letter has given her peace of mind, and when she had her annual review last year, the representative could see the determination right in her file. The process felt less overwhelming than trying to get consistent answers over the phone, and the written documentation is definitely worth having for the future.

I'm so sorry for your sister's loss, and I want to add another perspective that might be helpful. As someone who has navigated both survivor benefits and Medicaid waiver programs, I can confirm what others have said about Difficulty of Care payments generally not counting toward the Social Security earnings limit. However, I learned something important that I don't think has been mentioned yet - timing can matter for documentation. If your sister's Medicaid payments started before her husband passed away, versus after, the documentation requirements might be slightly different. Also, since she's caring for an adult disabled child, she should definitely ask SSA about potential disabled adult child (DAC) benefits on her late husband's record for their son if he hasn't already been evaluated for those. DAC benefits can sometimes provide additional financial support for families in exactly this situation. The combination of survivor benefits for her and potential DAC benefits for their son, along with the Medicaid payments continuing without affecting the earnings test, could provide more comprehensive support during this difficult transition.

I'm so sorry for your family's loss and want to echo what many others have shared about the Difficulty of Care payments typically not counting toward the Social Security earnings test. As a newcomer here, I've been reading through all these responses and am amazed at how helpful this community is! What strikes me most is how consistent the advice has been about getting everything documented properly. I went through something similar with my grandmother who received Medicaid waiver payments while also getting Social Security benefits. The one thing I'd add that might be helpful is to also document any changes in your sister's caregiving situation over time. Since these payments are tied to the level of care needed, if her son's needs change significantly in the future, it's good to have a paper trail showing the progression. Also, I noticed someone mentioned keeping a log of caregiving activities - this was something our family benefits counselor recommended too, and it ended up being really valuable when we had to provide additional documentation later. Your sister is lucky to have you advocating for her during such a difficult time. The combination of getting the formal earnings determination from SSA and having documentation from the Medicaid side sounds like the perfect approach to ensure she has peace of mind moving forward.

I'm so sorry for your sister's loss. This community has provided excellent advice, and I wanted to add one more resource that might help. Since your sister is navigating both survivor benefits and Medicaid waiver programs, she might benefit from contacting her state's SHIP (State Health Insurance Assistance Program) counselor. They're trained specifically in how Medicare, Medicaid, and Social Security interact, and they provide free counseling. While her son isn't Medicare-aged, SHIP counselors often have the most comprehensive understanding of how these different benefit systems work together. They can also help review all her documentation to make sure she's not missing anything important. You can find your local SHIP program through the State Health Insurance Assistance Program website. Also, when she does get that formal earnings determination from SSA, I'd suggest making several copies and keeping them in different places - one with her important papers at home, one in a safety deposit box if she has one, and maybe giving a copy to a trusted family member like yourself. These kinds of official determinations can be crucial if questions arise years down the road. Your sister is fortunate to have such a caring advocate helping her through this difficult time.

I'm new to this community but wanted to share my experience as someone who recently went through a very similar situation. My mother-in-law lost her husband last year and was also receiving Medicaid Difficulty of Care payments for their disabled adult daughter while collecting survivor benefits. The advice everyone has given here is absolutely spot-on - those payments typically don't count toward the Social Security earnings test, but documentation is everything. What I learned that might help your sister is to also request a copy of her state's Medicaid waiver manual section that specifically covers Difficulty of Care payments. Having that state documentation alongside the federal SSA determination creates a really complete paper trail. Also, I'd suggest she consider setting up a simple filing system specifically for all benefit-related documents - survivor benefits paperwork in one folder, Medicaid waiver documents in another, and correspondence with both agencies in a third. It sounds overly organized, but when you're dealing with grief and trying to manage multiple benefit programs, having everything easily accessible can reduce a lot of stress. The fact that she has you helping her navigate this is so important - these systems are complicated enough without having to figure them out while processing such a significant loss.

I'm so sorry for your sister's loss and what your family is going through right now. This thread has been incredibly informative - I'm amazed at how knowledgeable and supportive this community is! As someone new here, I wanted to add that your sister might also want to consider reaching out to a local disability rights organization or advocacy group in your area. Many of these organizations have staff who specialize in benefits coordination and can provide free assistance with navigating the intersection between Social Security and Medicaid programs. They often have experience with exactly these kinds of complex situations where multiple benefit programs overlap. What I've learned from similar situations in my work is that having an advocate who understands both systems can be invaluable, especially during the initial setup period. They can also help ensure she's receiving all the benefits she's entitled to and can assist with any future changes or reviews. The documentation advice everyone has given is absolutely crucial - I've seen too many cases where people had to recreate paperwork years later because they didn't keep everything organized from the start. Your sister is so fortunate to have you helping her through this difficult time, and it sounds like she's getting excellent guidance from this community.

I'm so sorry for your sister's loss and the additional stress of navigating these complex benefit systems during such a difficult time. This thread has provided incredible guidance, and I wanted to add one more perspective as someone who works with families in similar situations. Beyond all the excellent documentation advice, I'd suggest your sister consider establishing a relationship with a local eldercare attorney who specializes in disability and benefits law. While there may be some cost involved, many offer initial consultations at reduced rates, and having legal guidance can be invaluable when dealing with the intersection of survivor benefits and Medicaid waiver programs. They can also help ensure she's protected if SSA or Medicaid policies change in the future. Additionally, since she's caring for an adult disabled child, she might want to explore whether her son qualifies for an ABLE account - these special savings accounts allow people with disabilities to save money without affecting their benefit eligibility. The funds can be used for disability-related expenses and might provide additional financial flexibility for your family. Your sister is so fortunate to have your support during this challenging time, and this community has really shown how valuable it is to share experiences and knowledge about navigating these complicated systems.

I'm so sorry for your sister's loss. As someone who navigated a similar situation when my father passed and I was caring for my disabled brother, I can confirm what others have said - Medicaid Difficulty of Care payments typically don't count toward the Social Security earnings test for survivor benefits. The key is getting proper documentation from both sides. One thing I learned that might help is to also check if your state has a Medicaid ombudsman program - they can be incredibly helpful advocates when questions arise about how different benefit programs interact. They understand both the state Medicaid rules and federal Social Security requirements, which can be invaluable. Also, when your sister does get that formal determination from SSA, I'd recommend she also ask them to put a permanent note in her file about these payments being reviewed and excluded. This can prevent future confusion if different representatives access her case. The stress of managing all this while grieving is overwhelming, but having the right documentation and advocates in place really does provide peace of mind. Your sister is lucky to have you helping her through this difficult time.

I'm so sorry for your sister's loss and what she's going through right now. This thread has been incredibly helpful to read as someone new to this community - the depth of knowledge and support here is amazing. I wanted to add one resource that hasn't been mentioned yet that might be valuable for your sister's situation. Many states have Benefits Outreach Programs or similar services (sometimes called SOAR programs) that specifically help people navigate complex benefit situations involving multiple agencies. These programs often have staff who are trained in both Social Security and Medicaid rules and can provide ongoing support as situations change over time. They're usually free and can be especially helpful for families dealing with disability-related benefits alongside survivor benefits. Also, since your sister is managing so many different aspects of this situation, she might benefit from creating a simple calendar system to track important dates - like when her annual Social Security reviews are due, when her Medicaid waiver renewal comes up, or when she needs to submit any required documentation. Having those dates visible can help prevent last-minute scrambling for paperwork. The advice everyone has given about documentation is so important, and your sister is really fortunate to have your advocacy and support during this challenging time.

can someone please explain to me how you accomplished this with the earnings test? I have called Social Security at least 10x and get a different answer every time. My husband passed and I am receiving difficulty of care payments from a home and community based service through a Medicaid waiver myself for the care I provide for my adult disabled daughter at home. The program does not take taxes from me, but yet half of the reps say it disqualifies me from the in care benefits because it is considered earned income. HOW can it be earned income when I am not able to pay FICA on the monies, not able to earn my own work credits, not able to invest in a 401k, and not able to add to my own Medicare. I would be completely reliant on my deceased husband's record. This makes no sense. I do earn way above the yearly amount to determine my in care benefits, BUT I essentially have no way to prepare myself for my own retirement due to needing to fill out 2014-7 irs form because the program does not take taxes due to me providing care for her in my home. How did anyone get this letter of determination? I fear losing the benefits and being punished for taking care of my medically fragile adult daughter.