MSP Income Calculation and Disregards in New York
Gross Income Is Not the Number That Matters
Your parent's gross Social Security benefit is $1,850 a month. New York's 2026 QMB income threshold is $1,856 for an individual, including the $20 standard disregard. After that disregard, $1,850 becomes $1,830 in countable income, below the $1,836 base limit. New York uses a specific budgeting formula borrowed from SSI rules, and applying the required disregards can bring countable income under the threshold.
Understanding exactly how New York's local Department of Social Services or NYC HRA counts income is the difference between walking away from the application and getting approved for QMB.
The $20 Unearned Income Disregard
Every MSP applicant in New York gets a flat $20 subtracted from their gross monthly unearned income before the caseworker compares it to the Federal Poverty Level limit. New York's published income tables already fold this in — the 2026 QMB limit is listed at $1,856 for an individual, which reflects the 138% FPL base of $1,836 plus the $20 disregard.
What that means in practice: if your parent's only income is $1,856 or less from Social Security, pensions, annuities, or VA payments combined, they qualify for QMB. For QI, the comparable figure is $2,494 for an individual.
Couples living together are budgeted as a household of two, regardless of whether one or both spouses apply. The 2026 couple limits are $2,509 (QMB) and $3,375 (QI), again including the $20 disregard.
How Social Security Income Counts
The local district counts the gross Social Security benefit — the amount before Medicare Part B premiums, tax withholdings, or any other deductions. If your parent's Social Security award letter shows $1,900 in gross benefits but they only receive $1,697.10 after the $202.90 Part B deduction, the caseworker uses $1,900.
This trips up families who assume the lower deposited amount is what the agency counts. It is always the gross benefit that goes on the DOH-4328 form.
The same gross-first principle applies to pensions, annuities, and Railroad Retirement benefits. The figure before voluntary deductions is what matters.
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The Earned Income Formula
If your parent still works — part-time, seasonal, or self-employed — New York applies the SSI earned income disregard:
- The first $20 goes to unearned income (or earned, if unearned income is under $20)
- Then the agency subtracts $65 from gross earnings
- Then it disregards half of whatever remains
If the $20 general disregard has already been applied to unearned income, a parent earning $600 a month from part-time work has $267.50 in countable earned income: $600 minus $65 = $535, divided by 2. If the parent has no unearned income, the $20 disregard is applied to earnings first, leaving $257.50 countable after the $65 deduction and one-half disregard.
Impairment-Related Work Expenses and Blind Work Expenses are also deductible for qualifying applicants.
Health Insurance Premiums and MSP Eligibility
Premiums paid for private health insurance — including Medigap policies and commercial dental or vision coverage — may be considered in specific non-MAGI Medicaid spend-down calculations and rebudgeting assessments. Standard MSP intake uses the baseline SSI disregards; a Medigap premium is not a standard MSP income deduction.
Do not subtract a Medigap premium from countable income when checking MSP eligibility. If your parent also applies for full Medicaid, ask the district whether a separate spend-down calculation applies.
What Does Not Count as Income
Some income receives specific treatment under New York's SSI-based budgeting rules:
- VA Aid and Attendance — generally excluded or treated under specialized unearned income rules.
- Adult-child contributions — financial contributions from adult children living in the household are excluded unless they are direct, contractual cash payments for goods or services.
A common fear is that an adult child's financial contribution will count against a parent's MSP eligibility. New York excludes these contributions unless they are direct, contractual cash payments for goods or services.
What to Do If Income Is Close to the Line
If your parent's income is within $100 of the QMB or QI limit, do not assume they are ineligible. Confirm the gross Social Security amount from the award letter (not the bank deposit), and apply. Caseworkers sometimes make errors on the intake budget — requesting the full budget worksheet after any denial allows you to check whether every disregard was applied.
For a step-by-step walkthrough of the full application process and income calculations, the New York Medicare Savings Programs, Extra Help & EPIC Guide covers the rules with worked examples.
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