Idaho Gross Income vs Net Income for Medicare Savings Programs

The Most Common MSP Application Mistake

A parent checks their bank deposit — $1,167 from Social Security this month — and compares it to the QMB income limit of $1,350. Looks like they qualify easily.

But DHW doesn't use the deposit amount. The Department of Health and Welfare evaluates eligibility using gross Social Security — the full entitlement amount before Medicare Part B premiums, voluntary tax withholdings, garnishments, or any other deductions are subtracted.

That $1,167 deposit might represent a gross benefit of $1,369.90 (after $202.90 in Part B premiums). Now the parent appears to be $19.90 over the QMB limit. But there's one more step in the calculation.

The $20 General Income Disregard

Idaho applies a mandatory $20 monthly disregard to unearned income — which includes Social Security, pensions, and annuities. This disregard is subtracted from gross income before comparing to the program limit.

That $1,369.90 gross Social Security becomes $1,349.90 in countable income — just under the $1,350 QMB threshold. The parent qualifies.

This sequence trips up families constantly. They look at the bank deposit (too low — understates income) or the gross Social Security letter (too high — misses the disregard) and either apply when they don't qualify or don't apply when they do.

How to Find the Gross Figure

The gross Social Security benefit appears on:

• The annual Social Security award letter or annual benefit verification statement
• The my Social Security account at ssa.gov under "benefit verification"

It does not appear on bank statements. The deposit reflects net, not gross. Pension income is similar — use the gross pension statement amount, not the after-tax deposit.

Earned Income Gets a Bigger Break

If your parent works part-time, DHW applies two separate disregards to earned wages:

1. Exclude the first $65 of monthly gross earned income
2. Exclude half of what remains

A parent earning $500 per month from a part-time job: $500 minus $65 equals $435, divided by 2 equals $217.50. Only $217.50 counts as earned income. Combined with unearned income (after the $20 disregard), the total determines which MSP tier — if any — your parent qualifies for.

The Community Property Method

Idaho is a community property state. When a married couple applies together, DHW normally counts combined household income. But when only one spouse needs an MSP and the couple's combined income exceeds the limit, the community property allocation method may help.

Under this method, each spouse's separate income (Social Security, VA benefits) stays with them, and any community income (wages, rental income) is split 50/50. If one spouse has significantly higher Social Security than the other, splitting income this way can bring the applicant spouse's countable income under the threshold.

DHW applies spousal income deeming rules based on living arrangement:

• Both spouses applying: Combined income measured against couple limits
• One spouse applying, living together: Non-applicant spouse's income is deemed to the applicant under AABD rules; couple limit applies
• Spouses living apart: Each person evaluated individually against single limits

If your parents are separated — even informally, living in different households — each one may qualify individually under the lower single-person thresholds.

The Social Security Fairness Act Impact

The repeal of WEP and GPO applies to benefits payable from January 2024 onward. SSA began paying retroactive adjustments in February 2025, and implementation is complete. A retired teacher whose benefit was previously reduced under WEP should verify SSA's adjustment and any retroactive pay.

For affected beneficiaries, running the math with current gross benefits is essential. Don't rely on an income figure from before the Fairness Act took effect. People who never applied because of WEP or GPO must file a new claim; the adjustment is not automatic.

Getting the Math Right

The difference between qualifying and not qualifying for an MSP can be $20 — literally the amount of the general income disregard. The Idaho Medicare Savings Programs & Extra Help Guide includes a gross-to-countable income worksheet that walks through every step DHW uses: identifying gross income, applying the unearned disregard, calculating earned income exclusions, and testing against all four MSP tiers. It's designed for the parent or adult child to complete at the kitchen table before submitting anything.

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