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Depending on what type of government assistance an individual receives, there is a possibility that a reverse mortgage could affect his or her eligibility. Each type of government assistance is different and it is important to understand the implications of each category.

Reverse Mortgages DO NOT Affect Social Security Benefits

Social Security is an entitlement program provided by the government based upon factors such as your age and job history. These benefits are not considered need based and, therefore, will never be affected by the proceeds from a reverse mortgage. Find out what you are eligible for with our reverse mortgage calculator.

Reverse Mortgages and Supplemental Security Income Benefits

Supplemental Security Income (SSI) is a government program that was created to assist individuals who are disabled or are at least 65 years old and have limited financial resources.


Asset Requirements:

The US Department of Health and Human Services requires that a SSI recipient have under $2000 ($3000 for a couple) in available resources, such as bank accounts or bonds, at any time. If a SSI recipient were to receive $120,000 from a reverse mortgage and spent only $2,000, they would have $118,000 in available resources that would carry over into the next month. This would put that person well above the threshold of available assets and, therefore, disqualify them from receiving Supplemental Security Income (SSI).


Income Requirements

Some states also have restrictions on the amount of income a person may bring in each month and still qualify. Presently, the federal maximum is $674 ($1,011 for couples). An FHA reverse mortgage itself is not considered income, so it does not directly affect this eligibility requirement.


For more information on this topic, please contact either your local Area Agency on Aging or visit the Department of Health and Human Services website at http://www.cms.hhs.gov/MedicaidEligibility/07_IncomeandResourceGuidelines.asp.

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Reverse Mortgages DO NOT Affect Medicare Benefits

Medicare is an entitlement program provided by the government based upon factors such as your age and job history. These benefits are not considered need based and therefore will never be affected by the proceeds from a reverse mortgage.

Reverse Mortgages MAY Affect Medicaid Benefits

Medicaid is a need based program created by the government to assist people who are disabled or are at least 65 years old and have limited financial resources.


Asset Requirements

Medicaid requires that recipients have less than $2000 ($3000 for couples) in available resources, such as bank accounts or bonds, at any time. If a person were to receive $120,000 in a lump sum from a federally insured reverse mortgage and only spend $2,000 in one month, they would have $118,000 in available resources that would carry over to the next month. This would put that person well above the threshold for available assets and thus disqualify them from receiving Medicaid.


Income Requirements

The maximum income that one can receive each month and still qualify for this program varies by state. At this time, the federal maximum is $674 ($1,011 for couples). An FHA reverse mortgage itself is not considered income, so it does not directly affect this eligibility requirement.


For more information on this topic, please contact either your local Area Agency on Aging or Medicaid's eligibility section at http://www.cms.hhs.gov/MedicaidEligibility/07_IncomeandResourceGuidelines.asp.

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