Mg_y Ni (2 ≤ y ≤ 10) thin films covered with a Pd cap layer are hydrogenated in 1 0⁵ Pa H₂ between room temperature and 80 ° C and their dielectric function over(ε, ̃) is determined from reflection and transmission measurements. The hydrogenated Mg_y NiH_x thin films show a continuous shift of the optical absorption towards higher photon energies with increasing y. Comparison of the obtained dielectric functions with predictions from an effective medium theory show that a considerable doping of the Mg₂ NiH₄ host takes place at least for y ≤ 3.5 while no signature of MgH₂ is observed in that composition range in the optical spectra. This is in contrast to the predictions from the bulk phase diagram where a mixture of semiconducting Mg₂ NiH₄ (energy gap E_g = 1.6 eV) and MgH₂ (E_g = 5.6 eV) is expected.