Will my Medicaid waiver payments reduce my Social Security benefits?

Published: October 27, 2022

Full question: For caring for my adult disabled child in my home, I receive Medicaid waiver payments designated as “difficulty of care payments” under notice 2014-7, which are excludable from my gross income for both income taxes and FICA. If I begin to collect early retirement benefits before my FRA, do these payments above $19,560 reduce my benefit 1:2?

Hi there,

No. Those payments should not affect your benefits because they are not “earned income.” They are excluded from FICA, the Social Security and Medicare payroll tax contributions.

If you need personalized advice, please request a consultation with an RSSA here.

All the best,

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