Social Security counts as income for PACE, and it reduces your monthly benefit amount dollar-for-dollar

If you receive Social Security — whether retirement, disability (SSDI), or survivor benefits — PACE counts every dollar of it as unearned income. This means your PACE payment goes down by the amount you receive from Social Security. If you get $800 a month in Social Security and would otherwise receive $1,200 in PACE, your actual PACE payment will be $400.

The reason is straightforward: PACE is a needs-based program. The program assumes that money you already have reduces what you need from them. Social Security is treated the same way as income from a job, a pension, or a rental property — it all counts.

The one exception is a small monthly exclusion. Most PACE programs exclude the first $20 of any unearned income per month, then count everything above that. So if you receive exactly $20 or less in Social Security, it would not reduce your PACE. In practice, almost nobody receives that little.

Key Takeaways

  • PACE counts all Social Security income (retirement, disability, or survivor benefits) as unearned income that reduces your monthly PACE payment dollar-for-dollar.
  • Most PACE programs exclude the first $20 of unearned income per month, but this rarely matters because Social Security payments are almost always higher.
  • Your PACE payment is calculated by taking the maximum benefit amount and subtracting all income, including Social Security, minus the small exclusion.
  • If you receive both PACE and Social Security, you will see both payments each month — they are separate checks or deposits, but your PACE amount will be reduced.

How the income calculation actually works

PACE programs use a straightforward formula. They start with a maximum monthly benefit amount (this varies by state and program, typically between $1,000 and $2,000). Then they subtract all your countable income, which includes Social Security, wages, pensions, interest, and rental income. The result is your PACE payment.

The $20 monthly exclusion applies to unearned income only — money you do not earn through work. If you have both a job and Social Security, the program counts your wages separately and may have different rules for them. But Social Security itself gets the $20 exclusion, then everything above that reduces your PACE.

Some PACE programs also have an earned income exclusion, meaning they do not count the first portion of wages you earn from a job. This is designed to encourage work. Social Security does not get this benefit — it is treated as unearned income throughout.

What happens if you start receiving Social Security while on PACE

If you are already receiving PACE and then become may be able to access for Social Security, you must report it to your PACE program. Do this as soon as you receive your first Social Security payment or as soon as you know it is coming. The program will adjust your PACE payment starting the month after you report it.

You do not lose PACE entirely — you keep receiving it, but the amount goes down. How much it goes down depends on your Social Security amount and your state's maximum PACE benefit. If your Social Security is very high, your PACE payment might become very small or even zero, but this is rare for most recipients.

The adjustment is not automatic. PACE programs do not always know when you start receiving Social Security. You have to tell them. If you do not report it and they find out later, they may ask you to repay the overpayment — the PACE money you received that you should not have gotten.

Reporting Social Security income to your PACE program

Contact your local PACE program office directly. You will need to provide proof of your Social Security income, usually a copy of your Social Security statement or award letter showing the monthly amount. Your PACE caseworker will update your file and recalculate your benefit.

The timing matters. Report the income in the month you receive it or as soon as you know it is coming. PACE programs typically process changes within 10 to 30 days, and the new payment amount takes effect the following month. If you wait several months to report, the program may ask for repayment of the overpayment during that time.

Keep copies of all documents you submit. If there is ever a question about when you reported the income or what amount you reported, having your own records protects you.

Social Security and other PACE income limits

PACE has an overall income limit — if your total countable income exceeds a certain amount, you become ineligible for the program entirely. This limit varies by state but is typically around $1,000 to $1,500 per month for an individual. Social Security counts toward this limit.

If you receive Social Security that alone exceeds your state's income limit, you cannot receive PACE at all. For example, if your state's limit is $1,200 and you receive $1,300 in Social Security, you would be over the limit and ineligible. This is rare but does happen, especially for people with higher Social Security benefits.

There is also a resource limit — a cap on how much money and property you can own and still receive PACE. Social Security payments themselves do not count as a resource once you receive them (they are income, not assets). But if you save the Social Security money in a bank account, that savings does count toward your resource limit.

The difference between PACE and SSI when Social Security is involved

PACE and SSI (Supplemental Security Income) are different programs with different rules, but they often interact. If you receive SSDI (Social Security Disability Insurance), you might also receive SSI if your SSDI payment is low. Both PACE and SSI count Social Security as income, but they calculate it differently.

SSI has its own income exclusions and limits. PACE is a state program with its own rules. If you receive both SSI and PACE, you need to understand how each program treats your Social Security income. Your SSI caseworker and your PACE caseworker can each explain their program's rules, but you may need to ask them to clarify how the two programs work together in your specific situation.

The key point: do not assume that because Social Security affects one program a certain way, it affects the other the same way. Report all income to both programs and ask each one how they count it.

Frequently Asked Questions

If I get Social Security, can I still receive PACE?

Yes, as long as your total income does not exceed your state's limit and your PACE payment amount is still above zero after subtracting your Social Security. Most people who receive Social Security and PACE receive both payments each month, though the PACE amount is reduced by the Social Security amount.

Does my spouse's Social Security count toward my PACE income?

If you are married and both on PACE, your spouse's income counts toward their own PACE calculation, not yours. If you are married but only one of you receives PACE, the other spouse's Social Security may be considered depending on your state's rules — ask your PACE caseworker about your specific situation.

What if I did not report my Social Security and PACE overpaid me?

Contact your PACE program immediately and explain the situation. Programs have different policies on overpayment recovery. Some may forgive small overpayments or allow you to repay over time. The sooner you report it, the better your options usually are.

Can I work and receive Social Security and PACE at the same time?

Yes. Your wages, Social Security, and PACE can all exist together, though both your wages and Social Security reduce your PACE payment. Some PACE programs have an earned income exclusion that does not count the first portion of your wages, which can help. Ask your caseworker about this.

Does my Social Security cost of living adjustment (COLA) increase affect my PACE?

Yes. When your Social Security increases due to a COLA, your PACE payment decreases by the same amount (minus the $20 exclusion). Your total income goes up, but your PACE portion goes down to match.