Will Medicaid waiver payments as caregiver for my special needs adult child affect my early Social Security retirement?

This is a great question that comes up frequently with Medicaid waiver programs. Generally speaking, if income is excluded from gross income for federal income tax purposes, it typically won't count toward the Social Security earnings test limit either. Since Medicaid waiver payments for care of a family member are specifically excluded from taxable income under IRS Notice 2014-7, they shouldn't be counted when SSA determines if you've exceeded your earnings limit. However, I highly recommend getting this confirmed in writing from SSA before making your decision - rules about excluded income can be complex and sometimes misinterpreted by individual SSA representatives.

my mom was in almost the same situation!!! she got early SS at 62 and was taking care of my brother (he has downs syndrome). the medicaid waiver payments didnt count against her earnings limit. but she had to show some paperwork from medicaid to prove it was exempt income when she applied. this was in Indiana tho not Kentucky so maybe check if its different?

You really need to be careful with this. I've seen several cases where SSA initially counted Medicaid waiver payments toward the earnings limit because the field office staff wasn't familiar with the IRS exemption. Make sure you bring a copy of IRS Notice 2014-7 with you when you apply, along with documentation from your state's Medicaid waiver program showing you're providing care to a family member in your home. The POMS section that covers excluded income is RS 02505.240 if you want to reference that specifically. Also, have you calculated whether taking benefits at 62 is the best financial decision long-term? Your benefit will be permanently reduced by about 30% compared to your full retirement age benefit. Given your caregiving situation, you might want to run the numbers carefully.

Just wanted to add my experience... I started taking SS at 62 while helping care for my disabled sister (not through a waiver program though). WHAT A NIGHTMARE dealing with Social Security!!! Took me 5 weeks just to get an appointment, then they calculated everything wrong, then I couldn't reach anyone to fix it. Checks were delayed for months. Not saying this will happen to you but be prepared for frustration. Make sure you get EVERYTHING in writing!!! And keep copies of EVERYTHING!!!

Have you tried using Claimyr to get through to SSA? I was in a similar situation trying to understand how my pension would affect SS benefits. Spent days trying to reach someone. Found this service at claimyr.com that got me through to an actual person at Social Security in about 20 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU. Saved me hours of frustration and the agent I spoke with was able to give me a direct written answer about my excluded income question.

I think everyones forgetting to ask an important question - is your daughter receiving SSI or SSDI benefits herself? If she is, you becoming her paid caregiver through Medicaid might affect HER benefits too, not just yours. SSI has strict income and resource limits. This gets complicated fast when family members are paid caregivers AND receiving benefits themselves.

Everyone keeps talking about the earnings test but nobody mentioned that once you reach your full retirement age, the earnings test goes away completely!! So even IF the Medicaid waiver payments counted (which it sounds like they don't), it would only matter until you reach 67. After that you can earn whatever you want with no reduction in benefits. Just something else to consider in your planning.

have u checked if your daughter could get higher benefits as a disabled adult child (DAC) once u start collecting retirement? my cousins benefits went up when his dad retired because he could collect on his dads record instead of his own smaller benefit. might be something to look into

I think your best bet is to schedule an appointment with a claims specialist at your local SSA office and bring ALL documentation. Phone calls are hit or miss - sometimes you get someone knowledgeable, sometimes not. But in-person they can actually look at your documents and give better guidance. Just be prepared to wait FOREVER even with an appointment lol 🙄

To summarize what's been discussed and add a few more considerations: 1. Medicaid waiver payments for family caregivers are excluded from taxable income (IRS Notice 2014-7) 2. These payments should not count toward the Social Security earnings test 3. Bring documentation including IRS Notice 2014-7 and POMS reference RS 02505.240 4. Consider whether claiming at 62 vs waiting until FRA (67) makes financial sense long-term 5. Investigate whether your daughter could receive higher benefits as a DAC on your record 6. Remember the earnings test only applies until you reach your FRA 7. Document everything and get answers in writing from SSA Given the complexity of your situation, you might also want to consult with a financial advisor who specializes in Social Security claiming strategies, particularly one familiar with disability benefits. Some initial consultations are free or low-cost.

I wanted to add another perspective as someone who works with families navigating both Social Security and Medicaid systems. One thing that hasn't been mentioned is that you should also verify with your Kentucky Medicaid waiver program administrator about any reporting requirements when you start receiving Social Security benefits. Some states require notification of any household income changes, even if those changes don't affect the waiver payments themselves. It's usually just a formality, but better to be proactive than have any issues later. Also, since you mentioned being nervous about the paperwork - many Area Agencies on Aging have benefits counselors who can help walk you through the Social Security application process for free. They're often very familiar with how disability benefits and caregiving situations interact. Worth checking if Kentucky has similar resources available!

This is such valuable advice! I hadn't even thought about needing to notify the Medicaid waiver program when I start collecting Social Security. That's exactly the kind of detail that could trip me up later. I'll definitely reach out to them to ask about their reporting requirements. And thank you for mentioning the Area Agencies on Aging - I had no idea they offered benefits counseling. That sounds like exactly what I need since I'm feeling overwhelmed by all the moving parts. Having someone who understands both systems walk me through the process would be incredibly helpful. I'm going to look up Kentucky's Area Agency on Aging contacts today!

As someone who went through a similar situation with my disabled son, I want to emphasize something that might not be obvious - make sure you understand the timing of when to apply for your retirement benefits versus when to help your daughter apply for DAC benefits. In my case, we discovered that my son's DAC benefit would be higher than his current SSDI, but there was a specific window for when to file both applications to maximize our family's total benefits. The timing mattered because of how they calculate the family maximum and when benefits start. I'd strongly recommend speaking with someone at SSA who can run the numbers for your specific situation before you submit any applications. Also, keep in mind that if your daughter does switch to DAC benefits, it might affect any other benefits she receives, so you'll want to check with all her current benefit programs. This is definitely a case where getting professional guidance upfront can save you from costly mistakes later!

I'm a newcomer here but have been following this discussion with great interest since I'm in a somewhat similar situation with my aging mother who receives veteran's benefits. While I can't speak to the Medicaid waiver specifics, I wanted to add that when dealing with multiple government benefit programs, I've found it really helpful to create a simple spreadsheet tracking all the key dates, benefit amounts, and contact information for each program. It makes it so much easier when you're on the phone with different agencies and they ask for specific information. Also, based on what others have shared about the complexity of timing between your retirement application and your daughter's potential DAC benefits, you might want to consider applying for a Social Security Statement online first (if you haven't already) to get your exact benefit projections at different claiming ages. This will give you concrete numbers to work with when you speak to the benefits counselor or SSA representative. Good luck with everything - it sounds like you're being very thorough in your research which will definitely pay off!

As a newcomer to this community, I wanted to share that I'm currently helping my elderly father navigate a similar situation with multiple benefit programs, and this entire discussion has been incredibly educational for me too! One thing I learned from our experience that might be helpful is to ask specifically about "protective filing dates" when you contact Social Security. If you're not quite ready to fully apply but want to lock in a potential start date, you can sometimes establish a protective filing date that preserves your ability to claim benefits retroactively. This could be especially important given all the research you're doing about the DAC benefits for your daughter - you don't want to miss out on any benefits while you're still figuring out the optimal timing. Also, I second everyone's advice about getting everything in writing, but I'd add that it's worth asking for the representative's name and direct contact information when possible. Having a specific person to follow up with can save a lot of time if questions come up later. Best of luck with your decision!

As a newcomer to this community, I wanted to thank everyone for sharing such detailed and helpful information! I'm in a somewhat different situation but dealing with similar complexity around Social Security timing and benefit interactions. Reading through all these responses has been incredibly educational. One thing I'd like to add that might be helpful - when I was researching my own situation, I discovered that the Social Security Administration has a publication called "What You Need to Know When You Get Retirement or Survivors Benefits" (Publication No. 05-10077) that has a section specifically about what income counts toward the earnings test. It might be worth reviewing alongside the other references people have mentioned. Also, I noticed several people mentioned the importance of timing between different applications. You might want to ask about "deemed filing" rules when you speak with SSA - these rules can sometimes affect when certain benefits start or how they're calculated when multiple family members are involved. Best of luck with your decision - it sounds like you're doing all the right research to make an informed choice!

As a newcomer here, I wanted to share something that might be helpful based on my own experience navigating Social Security with a family member who has disabilities. One resource that really helped me was contacting a Certified Social Security Advisor (CSSA) for a consultation. While some charge fees, many offer initial consultations at reasonable rates and they specialize in exactly these types of complex situations involving multiple benefit programs and family caregiving. They're trained specifically on how different types of income interact with Social Security benefits and can often spot optimization strategies that aren't immediately obvious. Given that you're dealing with Medicaid waiver payments, potential DAC benefits for your daughter, and the timing of your own retirement, having someone who understands all these moving pieces review your specific situation might be worth the investment. Many CSSAs also have direct contacts at SSA who can help clarify policy questions more efficiently than going through general customer service. Just another option to consider as you're doing your research!

As a newcomer to this community, I wanted to share a resource that might help with finding a Certified Social Security Advisor. The National Social Security Association (NSSA) has an online directory where you can search for CSSAs by location. You can find it at nssa.com - just look for their "Find an Advisor" tool. I used this when I was dealing with my own complex Social Security situation involving spousal benefits and it was really helpful. Many CSSAs also offer virtual consultations, so even if there aren't many in Kentucky specifically, you might be able to work with someone remotely. Also, I wanted to add that some non-profit organizations like AARP and local Senior Centers sometimes have volunteers or staff who are trained in Social Security basics and can help you organize your questions before you meet with SSA or a paid advisor. While they can't give the same level of specialized advice as a CSSA, they can often help you understand the terminology and prepare better for those more detailed consultations. Your situation really highlights how valuable this community is for sharing experiences and resources!

As a newcomer to this community, I want to echo what others have said about how valuable this discussion has been! I'm currently helping my sister navigate Social Security disability benefits, and reading through all these responses has taught me so much about the complexity of these systems. One thing I'd like to add that might be helpful - when you're gathering all the documentation people have mentioned (IRS Notice 2014-7, POMS references, Medicaid waiver paperwork), consider making multiple copies of everything and organizing them in a binder or folder system. I learned this the hard way when helping my sister - having everything organized and easily accessible makes such a difference when you're dealing with multiple agencies or advisors. Also, based on what others have shared about the importance of timing between your retirement application and your daughter's potential DAC benefits, you might want to create a timeline document that shows key dates like your 62nd birthday, when you plan to apply, and any deadlines or windows for optimizing benefits. This can help you visualize the decision points and make sure you don't miss any important timing considerations. Best of luck with your research and decision-making process!