South Carolina Medicare Savings Program Income Disregard: How the $20 Exclusion Works

The single most common reason South Carolina families rule themselves out of the Medicare Savings Programs too early is comparing gross income to the published poverty guidelines. SCDHHS doesn't use gross income — they apply a $20 general income disregard first, and for people with earned income, the reductions go further.

The $20 General Disregard

Every MSP applicant in South Carolina gets a flat $20 per month subtracted from their income before SCDHHS compares it against the eligibility limits. This disregard comes off unearned income first — Social Security retirement or disability benefits, pensions, VA compensation, annuity payments. If total unearned income is less than $20, whatever remains of the disregard applies to earned income.

This sounds small, but it shifts the effective QMB ceiling from $1,330 (the raw 100% FPL figure) to $1,350. For someone with gross Social Security of $1,345, the disregard drops their countable income to $1,325 — comfortably within QMB, which pays Part A and Part B premiums, the $283 Part B deductible, and all Medicare coinsurance and copays.

Earned Income Gets Additional Exclusions

If your parent works, the math is more generous. After the $20 general disregard is applied, SCDHHS excludes the first $65 of gross monthly earnings and then half of everything remaining.

Say your parent has $900 in Social Security and $600 from a part-time job. The calculation:

1. Apply $20 disregard to unearned income: $900 − $20 = $880
2. Exclude first $65 of earned income: $600 − $65 = $535
3. Exclude half of the remainder: $535 ÷ 2 = $267.50

Countable income: $880 + $267.50 = $1,147.50. Despite gross income of $1,500, your parent falls well within QMB's $1,350 ceiling.

What Counts as Income

SCDHHS counts Social Security at the gross benefit amount — before Part B premiums, tax withholding, or any voluntary deductions are subtracted. The net deposit hitting your parent's bank account is lower than the number SCDHHS uses.

VA Aid and Attendance and Housebound allowances are excluded entirely. Standard VA disability compensation and pensions count as unearned income. Private pensions and annuities count at their full gross monthly amount.

For married couples living together, both spouses' income is combined and measured against the couple limits, even if only one spouse has Medicare.

Why This Matters

The $20 disregard and the earned-income exclusions mean the effective eligibility ceiling is always higher than the raw poverty-line number. Before deciding your parent won't qualify, run the actual math. The South Carolina Medicare Savings Programs & Extra Help Guide includes a step-by-step income calculation worksheet that applies every disregard so you can see the real countable figure.

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