How Washington Calculates Income for Medicare Savings Programs
Gross Income Is Not Countable Income
The most common reason families assume they don't qualify for Washington's Medicare Savings Programs is that they look at gross monthly income and compare it directly to the program limits. That comparison ignores the disregards Washington is required to apply before making an eligibility determination.
Countable income — the number DSHS actually uses — is almost always lower than gross income.
The $20 General Disregard
Each household gets a flat $20 general income disregard per month. It is applied to unearned income first; any unused portion can be applied to earned income. This applies to Social Security retirement benefits, SSDI, pensions, annuities, VA payments, and other unearned income sources.
Example: Your parent receives $1,480 per month in Social Security. Gross income is $1,480. After the $20 disregard, countable income is $1,460 — under the QMB single limit of $1,463. Eligible.
Without that $20 deduction, the same person would appear to be $17 over the QMB limit. A lot of families stop right there and never apply.
Earned Income Gets Additional Deductions
If your parent or their spouse works, the earned income calculation is more generous:
- Apply any unused portion of the $20 general disregard first
- Deduct the first $65 of gross monthly earnings
- Deduct 50% of the remaining earnings
- Subtract Impairment-Related Work Expenses (IRWEs) for disabled workers
Example: A 67-year-old receives $1,200 in Social Security and earns $600 per month part-time.
- Unearned income: $1,200 − $20 disregard = $1,180
- Earned income: $600 − $65 = $535 → $535 × 50% = $267.50
- Total countable income: $1,180 + $267.50 = $1,447.50
That's under the QMB single limit of $1,463, even though gross total income is $1,800.
Free Download
Get the Washington — Medicare Savings Program Eligibility Checklist
Everything in this article as a printable checklist — plus action plans and reference guides you can start using today.
Spousal Income Rules
When one spouse has Medicare and the other doesn't, DSHS evaluates combined household income against the couple limit. If that renders the Medicare spouse ineligible, Washington applies spousal allocation rules under WAC 182-512 — deducting a living allowance for the non-applying spouse before comparing the remainder to the single standard.
This two-step evaluation means a couple with combined income above the couple limit might still qualify if the non-Medicare spouse's needs consume enough of the household income.
The COLA Timing Gap
Social Security's annual Cost-of-Living Adjustment takes effect in January, but Washington's updated FPL-based income limits don't kick in until April 1. During January through March, Washington disregards the COLA increase entirely — it doesn't count toward MSP income.
Starting April 1, both the COLA and the updated limits apply simultaneously. In most years, the new FPL standards absorb the COLA increase. But in years when COLA outpaces FPL growth, people on the margin can tip over.
Special Rules for Other Income
Washington's SSI-related rules treat these income types as follows:
- Food assistance (SNAP/Basic Food benefits)
- Energy assistance payments (LIHEAP)
- Nonrecurring lump sums: Anticipated payments other than retroactive SSI/SSDI are counted as income in the month received (WAC 182-512-0700(2)). Refunds or rebates for amounts already paid and payments to repair or replace an exempt resource are excluded under WAC 182-512-0600(2)(c)-(d).
- In-kind support: In-kind support from someone who is not legally responsible for the applicant is excluded unless it is earned. Support from a legally responsible person follows SSI-related rules (WAC 182-512-0800(10)).
Running Your Own Calculation
Before applying, work through the math with your parent's actual numbers. Start with gross unearned income, subtract $20, add net earned income (after the $65 and 50% deductions), and compare to the 2026 limits. If countable income is at or below $1,835 (single) or $2,490 (couple), at least QI-1 coverage is likely available.
The Washington Medicare Savings Programs & Extra Help Guide includes printable income worksheets with line-by-line instructions for every income type.
Get Your Free Washington — Medicare Savings Program Eligibility Checklist
Download the Washington — Medicare Savings Program Eligibility Checklist — a printable guide with checklists, scripts, and action plans you can start using today.