The association between income and mortality, morbidity and dependency is examined in a 3-year prospective follow-up study of 2032 subjects aged 70 years and above in the Hong Kong Special Administrative Region, China. Subjects were recruited using stratified disproportional random sampling of the Old Age and Disability Allowance Schemes, covering over 90% of the population. Subjects were interviewed at baseline and after 36 months. Presence or absence of disease was based on self-report of doctor diagnosis together with a check of medication taken. Functional status was measured using the Barthel Index. For the disease analysis, subjects with the disease being analyzed at baseline were excluded; similarly for the dependency analysis, subjects who were dependent at baseline were excluded. Chi-square test, univariate and multiple logistic regression were used to examine the association between income and mortality, development of new disease, and dependency. There was no association between income and mortality, or with development of new disease. Development of dependency was associated with lower income at baseline. An income of less than 1000 HK dollars per month increased the risk of dependency by 1.8-fold (95%CI 1.1-2.9). However, this association disappeared after adjustment for age and sex. Absolute income is not an important factor contributing to mortality, morbidity and dependency in elderly Chinese aged 70 years and above. A freely accessible health and social service at low or no cost, the survivor effect, or other factors may account for the lack of association with income, contrary to findings from studies of whole populations worldwide. Therefore manipulating income alone is unlikely to affect these outcomes in the elderly.