In some instances, a reverse mortgage can affect a homeowner’s eligibility for government benefits.

If the homeowner wants to receive benefits from Medicaid, the joint federal and state health insurance program for some low-income and elderly Americans, their eligibility will be based on both their income and their assets. Income from a reverse mortgage won’t count against them, but if they received a lump sum from the reverse mortgage, that will be included among their assets. If their total assets exceed the limit for their state, they will have to spend down the money in order to be eligible.

Similarly, money from a reverse mortgage lump sum can affect a person’s eligibility for Supplemental Security Income (SSI), a federal program for low-income individuals. The SSI program also sets limits on assets (which it refers to as “resources”), currently $2,000 for individuals and $3,000 for couples.

source – investopedia