There is a two-part answer -- one part for Social Security, a different part for Medicaid -- to your question about how much your mother can earn without losing her
benefits. Let's take them one at a time.
For any adult under full retirement age (which for your mother is age 66) who is collecting Social Security benefits, those benefits are reduced if the person earns over a certain amount of money in a year. In 2012, the amount will be $14,640 per year. Your mother's Social Security benefits will be reduced by $1 for every $2 she earns over that amount. Once she reaches full retirement age of 66, there is no limit on the amount she can earn without penalty.
The rules for Medicaid eligibility are different, and vary from state to state. So, the exact amount your mother can earn and still qualify for Medicaid coverage depends on where she lives. In almost all states, someone can be eligible for Medicaid if their income is less than about $500 per month, and in many states she might earn up to about $1,200 per month and still be eligible for Medicaid. Also, in some states, she would be allowed to earn more than the standard amount if she has high regular medical bills (say, for prescription medicines or ongoing treatments). To find out what the standards are in the state where your mother lives, you or she should contact the local department of social services or department of welfare. You can find out the contact information of that office, and the general Medicaid eligibility rules for her state, by going onto the state's Medicaid program website. To find that site, go to the state-by-state list provided by the federal government's Centers for Medicare and Medicaid Services[cms.gov].