Woman searches for financial assistance through grants or crowdfunding that may affect her Medicaid or SSI

How Financial Assistance Can Impact Your Government Benefits

Cancer is expensive. And, it is common for people to need financial help to pay for the cost of care and daily living expenses, and to help offset the loss of wages when taking time off work. But, if you are getting financial help, like through grants or crowdfunding, it is important to understand how that might impact your government benefits. Qualifying for Medicaid, Supplemental Security Income (SSI), and other government benefits is based on your income level and sometimes other financial resources, like money in a bank account. If you receive financial help, it may disqualify you for these programs.

What is Considered Income & Resources?

Both Medicaid and SSI consider two types of income:

  • Earned income is money that you earn from working at a job.
  • Unearned income can include money from retirement accounts, disability or unemployment benefits, and interest income.

This chart explains different types of income and how it may affect your eligibility for Medicaid and SSI:

Type of Income & ResourcesExamplesImpact on Eligibility
Earned IncomeWages, salaries, net earnings from self-employmentCounted as income and affects eligibility if above limits
Unearned IncomeSocial Security benefits, pensions, retirement accounts, state disability payments, unemployment benefits, interest income, dividends, cash from friends and relativesCounted as income and affects eligibility if above limits
In-Kind IncomeFood (through September 30, 2024), and shelter (e.g., a charity pays your rent for 3 months)Counted as income and affects SSI eligibility and the amount that you can receive. But does not include SNAP benefits, home energy assistance, or food or shelter provided by nonprofit agencies, state or local government, or Indian tribe.
Lump-Sum PaymentsInheritances, lottery winnings, legal settlements, insurance payouts, grant payments from charitable organizationsCounted as income in the month received and as a resource if kept past 30 days. Large cash gifts, grants, or donations can be considered assets if kept into following months, potentially exceeding Medicaid resource limits. For SSI, such cash gifts can count as income unless excluded for specific purposes like educational expenses
Resources (aka Assets)Cash (limit of $2,000 for individual, $3,000 for married couple), real estate, vehicles, stocks, bonds, personal property, life insurance policies, trusts, money in a bank account, second homeCounted as resources and can affect eligibility if total value exceeds limits
Non-Countable ResourcesPrimary residence, one car, personal daily use items, everyday household itemsGenerally excluded from resource limits and do not affect eligibility
Student Loan DischargeDischarge due to disability or public service loan forgivenessNot considered income and does not affect eligibility
Payment of Medical BillsFor example, someone receives hospital charity care or payment from a charitable organization for a medical bill Not considered income and does not affect eligibility. See SSA for more details.

How Does Financial Help Impact SSI?

SSI is a long-term disability benefits program run by the Social Security Administration (SSA). It provides monthly cash payments to individuals who are over the age of 65 or have a disability and have limited income and resources. In most states, if someone qualifies for SSI, they will also automatically qualify for Medicaid. But not everyone who has Medicaid will have SSI.

The purpose of SSI is to help meet basic needs for food, clothing, and shelter. The amount of SSI benefits you receive are determined by your “countable” income. But there are some exclusions of countable income, including:

  • Supplemental Nutrition Assistance Program (SNAP) benefits (also known as food stamps)
  • $65 earned income in a month
  • Educational grants, scholarships, fellowships, or gifts used for tuition and educational expenses are not counted as income for nine months after receipt
  • Need-based assistance from state or local governments, or an Indian tribe 

Learn more about SSI and income.

How Does Financial Help Impact Medicaid? 

Medicaid is a federal health insurance program that covers individuals and families with low income, and sometimes low resources. Eligibility varies by state.

Certain types of income are excluded for Medicaid eligibility, including:

  • Supplemental Nutrition Assistance Program (SNAP) benefits
  • Educational grants, scholarships, and fellowships used for tuition and education expenses
  • Child support payments received by a custodial parent for a child (in some states such as Oregon)
  • Some Veteran’s benefits (varies by state)

States can add their own income exclusions for Medicaid, so contact your State Medicaid Agency for specific information.

How Does Crowdfunding Impact SSI and Medicaid?

Crowdfunding (asking for donations from others) may be an effective way to help pay for medical and other expenses. Funds raised through crowdfunding are classified as gifts by the IRS, so they typically are not considered taxable income and are considered “unrestricted” funds. This means that the funds raised can be used for any expenses an individual might have.

However, crowdfunding income may impact someone’s eligibility for Medicaid, SSI, and other government benefits.

Money raised through crowdfunding may be considered countable income. This can reduce SSI benefits and affect Medicaid eligibility by increasing total income or assets. Some people may consider establishing a fundraiser and having friends or family members accept funds on their behalf, and then pay for their needs from those funds. However, this arrangement may be considered “in-kind income” and could still impact benefits.

What are 2 Ways to Protect Your Benefits?

  1. Use an ABLE Savings Account for individuals with disabilities and their families. The beneficiary of an ABLE savings account is the account owner, and contributions can be made by anyone (including family and friends) using post-taxed dollars. The most significant impact of ABLE accounts is that the funds will not be counted against individuals for the purpose of determining eligibility for governmental programs.
  2. Create a Special Needs Trust to hold the money raised in a crowdfunding campaign. Individuals with a disability can hold an unlimited amount of assets in a special needs trust for their benefit and are not considered “countable assets” for government benefits. 

For more information on crowdfunding and ways to ensure you keep access to benefits, see our Quick Guide to Crowdfunding.

What Are 4 Tips to Keep Access to Government Benefits?

  1. Keep detailed records of the funds received and how they are used.
  2. Spend down any extra income for medical or necessary expenses, in the month that you receive it. 
  3. Monitor your monthly income and assets regularly to stay within eligibility limits.
  4. Get help from a professional. You can talk to an estate planning attorney or accountant to understand your options to make sure you don’t lose your benefits.

For more information about cancer and finances, visit our Financial Resources Hub.

About Triage Cancer

Triage Cancer is a national, nonprofit providing free education to people diagnosed with cancer, caregivers, and health care professionals on cancer-related legal and practical issues. Through eventsmaterials, and resources, Triage Cancer is dedicated to helping people move beyond diagnosis.

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Monica Bryant