The objective of this study was to quantify the impact that having arthritis has on income poverty status and accumulated wealth in Australia. Cross-sectional analysis of Health&WealthMOD, a microsimulation model built on data from the Australian Bureau of Statistics’ Survey of Disability, Ageing and Carers and STINMOD, an income and savings microsimulation model. Across all categories of labour force participation status (employed full time, part time or not in the labour force at all), those with arthritis were significantly more likely to be in poverty. Those employed full time with no health condition had 0.82 times the odds of being in income poverty (95 % CI 0.80–0.84) compared with those employed full time with arthritis. Those not in the labour force with no chronic health conditions had 0.36 times the odds of being in income poverty compared with those not in the labour force due to arthritis (95 % CI 0.36–0.37). For people not in the labour force with no long-term health condition, the total value of their wealth was 211 % higher (95 % CI 38–618 %) than the amount of wealth accumulated by those not in the labour force due to arthritis. Similarly, those employed part time with no chronic health condition had 50 % more wealth than those employed part time with arthritis (95 % CI 3–116 %). Arthritis has a profound impact upon the economic circumstances of individuals, which adds a further dimension to the detrimental living standards of older individuals suffering from the condition.