Income levels and health status are related variables, because an increase in income enables greater access to assets that improve individual health status, and because productivity and income gains are associated with improved workers’ health. Recent Brazilian experience offers favorable conditions to overcome the simultaneity problem that occurs when estimating the impact of income on health. A special health edition from both the 1998 and 2003 National Household Surveys (PNAD) shows the relationship between changes in these two variables. In addition, the Brazilian government has adopted and expanded several income transfer programs targeting the poor elderly population. The strategy used to identify the effect of income on health consisted of comparing the health status of eligible and non-eligible groups, before and after the expansion of income transfer programs. We used differences in estimates based on logistic regression. Our results show a distinct gain in the health status of lower-income seniors and do not allow rejecting the hypothesis that income changes have an impact on perceived health conditions.