I would be totally honest with her. Hearing loss can be a safety issue as well. Does she drive? Can she hear a car honking, a phone ringing, a doorbell?
In this tough ecomony if she losses her job finding another and keeping it is most difficult. Being honest is hard, but it is the kindest thing in the long run.
If she losses her job you will know that you were honest with her and she has to now be honest with herself.