The income from a reverse mortgage will not affect eligibility for Social Security, Medicare or other retirement benefits or pensions that are not based on need.

However, without careful planning, the income from a reverse mortgage could affect eligibility for supplemental security income (SSI), Medicaid, food stamps, and some state benefit programs.

In general, reverse mortgage payments are considered to be a loan and will not affect benefits if the money is spent during the month in which it is received. But if the money is not spent during that month, it will be counted as a resource and may lead to termination of benefits. Be aware that payments received under the annuity mortgage plans will be considered income, even if they are spent in the month in which they are received.