Yes, a person who receives disability benefits can own a car, but there are some considerations to make before a beneficiary makes the purchase. Continue reading to learn more about how owning a car affects your access to disability payments.
SSI vs. SSDI
In the United States, there are two disability benefits programs. A person with a disability may qualify for Supplemental Security Income (SSI) or Social Security Disability Income (SSDI). It is rare for someone who qualifies for SSI to qualify for SSDI as well, and vice versa. The value of your assets dictates whether you receive SSI or SSDI benefits.
Resource Limits for SSI Beneficiaries
SSI is available for seniors and people with disabilities who have very limited means. SSI provides a minimum amount of financial assistance for cost-of-living expenses for those who qualify. To remain eligible, people who receive SSI can't have resources over a set amount.
The Social Security Administration resource limit for SSI recipients is $2,000 and, for married couples, $3,000.
Can I Own a Car if I Receive SSI Benefits?
Yes. A person who receives SSI can own a car and keep their benefits. However, there are limitations on ownership. According to the Social Security Administration, beneficiaries can own one car if they use it to transport themselves or other family members. Social Security does not count the car’s value against the resource limit.
You should be careful if you own multiple vehicles in your name or if your spouse owns a separate vehicle. You can lose your SSI eligibility if you own more than one car.
Resource Limits for SSDI Beneficiaries
The Social Security Administration pays SSDI benefits to disabled people with a qualifying work credit. A person who has a disability but does not work may rely on the work history of their parent or spouse.
The income limit for SSDI recipients is unlimited for the beneficiary’s trial work period. Once the trial work period ends (after 36 months), the beneficiary can't earn more than $1,550 monthly. If the beneficiary is blind, they can't earn more than $2,590 per month.
Can I Own a Car if I Receive SSDI Benefits?
Yes. A person who receives SSDI benefits can own a car. Unlike SSI beneficiaries, if you get SSDI payments, you can own as many vehicles as you wish.
Should I Create a Trust or Sell My Car?
If you receive SSI benefits and have multiple cars, you may consider creating a trust or selling your other vehicles. However, the government’s transfer of resources rule can affect your SSI eligibility.
Generally, SSI recipients will lose their benefits for up to 36 months if they transfer property to circumvent the resource limit set by the Social Security Administration. Your ineligibility period depends on the value of the resource.
The money you receive from selling your vehicle may put you over the resource limit. If that happens, you will be ineligible for SSI benefits.
If you transfer the car to a trust, the Social Security Administration may consider the trust itself a resource. The value of the trust may make you ineligible for SSI payments.
Speak to a Special Needs Planner
A car is a great thing to have. Owning a vehicle makes transportation and running errands easier. It also gives you a sense of freedom. However, if you receive disability payments, you must consider your access to benefits.
Keeping your disability benefits can be confusing and overwhelming. Fortunately, professional help is available. If you have questions about your options, speak to a local special needs planner.