Can PA Medicaid and waiver program take my father's $1,778 monthly income, which includes a pension check?

Medicaids co pay or SOC (share of cost) requirements will depend on which Medicaid program he is applying to.
For the states - which administer it under federal guidelines - Medicaid is beyond huge and ranges from loaning breast pumps for free under WIC, those giant dental vans that do preventative care free for CHIP enrolled kids, to LTC in a NH which requires a copay of NH resident monthly income. What specific Medicaid is he applying to?

Your profile suggests you live with and caregive for your parents in their home. Is that right?
If so, imo, dealing with & understanding Medicaid for them & how it can affect you is just not a DIY project and all of you will be best served in meeting with an elder law atty AND ahead of ever filing his Medicaid application.

Like if he’s applying to community based Medicaid program (so he’s living in house), it’s going to have lots more latitude as to both their income & assets as they both need $ to enable them to continue to live in the community but they will need to still meet Medicaids low income threshold for your state AND he will need to be assessed to need care. And whether provided in home or at a community based Medicaid program (like PACE, which states are leaning to & run by a nonprofit like Catholic Charities health care division). Most community based Medicaid programs run on ”dual” enrollees to get paid, so folks have to be on Medicaid & Medicare with little or no copay as long as the care provider takes the M&Ms or they stay in the network that is under Medicaid contract for your state (Molina Health does this in a lot of states). For the above type of community Medicaid, a couple probably low income enough that no $ needed outside of minimal copays.

But IF your dad is looking for getting IHHS (in home health services), where someone is paid by Medicaid to provide 1-on-1 care for him 2-4 days a week based on his needs assessment, those will require a % of his income paid to state to offset the costs of the caregiver. Both CA & AZ have well established IHHS programs. And you as a non spouse resident of the household can be paid to caregive a parent. Seems to be abt 20 hrs a week at slightly above minimum wage with taxes, fica, etc done. Most states do NOT do IHHS and most caregiving is done by family for free.

For LTC NH medicaid, his monthly income must be paid to the NH. Your mom as a community spouse (CS) can get CRSA or MMNA (a resource allowance) if her income alone will not be enough to cover her living costs. If she needs his income, it gets approved by Medicaid to be waived to go to her instead of being paid as the SOC to the NH. It has to be documented financial need and states have preset limits for CSRA / MMNA.

Whatever the case, for any type of over 55 Medicaid enrollment, Medicaid is required to attempt a recoup (MERP) of all $ spent. Just how & what Medicaid does is super interdependent on your states laws for property rights, probate laws AND also if there are any exemptions, exclusions to MERP. If you’ve been a caregiver for over 2 yrs and can provide documentation to establish this, you might qualify for that exemption. And this is something that the atty will need to deal with for you & ahead of ever filing dads application.

If all your folks $ is needed to keep household afloat due to heavy debt, and you don’t have your own income, LTC NH may just not be feasible. Really CS options needs advice of a NAELA or CELA level of elder law attorney. Not a DIY.

If your mother is still alive Medicaid would leave her enough money to pay her living expenses, then take any remainder towards providing for your father's care.