Social Security Fairness Act and Delaware Medicare Savings Program Eligibility

The Social Security Fairness Act, signed on January 5, 2025, repealed two provisions that had reduced Social Security benefits for some people with government pensions: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). If your Social Security benefit was reduced under either provision, the repeal may have increased it.

That raises an immediate practical question for Delaware families: does a higher Social Security payment push someone over the income limits for the Medicare Savings Programs?

How the Repeal Affects MSP Income Calculations

Delaware evaluates Medicare Savings Program eligibility based on gross countable monthly income, including Social Security and pension income, after applicable disregards. The standard $20 unearned income disregard applies. The 2026 income limits after the disregard are:

• QMB: $1,350/month individual, $1,824/month couple
• SLMB: $1,616/month individual, $2,184/month couple
• QI: $1,816/month individual, $2,455/month couple

If the WEP/GPO repeal raised your parent's Social Security check by $200 or $300 a month — which is common for retirees who had significant government pension income — the new gross benefit could push them from one MSP tier into a higher one, or potentially above the QI ceiling entirely.

For a basic estimate, include gross Social Security, pensions, and other countable income, then apply the relevant disregards before comparing the total against the thresholds above. If earned income is involved (a part-time job, for example), additional disregards apply: the first $65 of earned income is excluded, plus half of what remains.

What About the Retroactive Lump-Sum Payment

SSA paid retroactive adjustments starting February 2025, covering benefits back to January 2024. For someone whose WEP reduction had been $250 a month, the lump sum could have been $3,000 or more.

In Delaware, this lump-sum payment is handled clearly:

• As income: The retroactive payment is excluded from income in the month received for MSP eligibility determinations. It does not count against the monthly income thresholds.
• As a resource: Because Delaware has completely eliminated the asset test for QMB, SLMB, and QI, whatever you deposit from the lump sum into a bank account is irrelevant. No amount of savings disqualifies you from a Medicare Savings Program in Delaware.

So the retroactive check itself causes no eligibility disruption. Only the ongoing monthly increase matters for future determinations.

The COLA Protection Window

When Social Security applies a Cost-of-Living Adjustment (COLA) in January, it raises monthly benefit amounts. Under federal rules adopted by Delaware, the COLA increase is disregarded for MSP eligibility through March 31 of that year. This prevents the COLA increase itself from causing a loss of MSP coverage during the first quarter.

The COLA disregard lasts through March 31, and updated FPL income limits take effect for MSP processing on April 1. Use the limits in effect for the relevant application period when checking eligibility.

In 2026, the Part B premium is $202.90 per month. Delaware evaluates gross Social Security income before deductions, and the standard $20 unearned income disregard applies to the MSP calculation.

Who Should Re-Apply

If your parent was previously denied for a Medicare Savings Program — or never applied because they assumed their WEP/GPO-reduced benefit meant they earned too much — check the current countable income. A higher Social Security benefit may move someone into a different MSP tier or above the QI ceiling; a public pension itself remains countable income.

Use the gross monthly Social Security amount shown on the current benefit statement, before Part B premiums, taxes, or other deductions, and add any pension or other countable income. Apply the relevant disregards, including the standard $20 unearned income disregard, then compare the countable total against the limits above. If it is below the QI limit of $1,816 for an individual, an application through Delaware ASSIST is worth filing.

For a step-by-step eligibility worksheet and application walkthrough, our Delaware Medicare Savings Programs, Extra Help & DPAP Guide covers the income calculation in detail and includes a template for tracking the numbers.

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