Can a Person Who Receives Disability Benefits Own a Car?

Red CarThe short answer is yes.  Although many disability benefit programs like Supplemental Security Income (SSI) and Medicaid impose resource limits on beneficiaries, a beneficiary's household is allowed to own one vehicle of any value as long as it is used to transport the beneficiary or a member of the beneficiary's household.

But the longer answer is more complicated – car ownership in the context of someone with special needs is not a simple proposition.  For starters, there is the question of who owns the vehicle.  If the car is being purchased with the beneficiary's own money, he will in all likelihood be the owner, because the purchase of a car for another person could violate the government's strict transfer-of-resource rules.  However, car ownership by the beneficiary could be problematic if the beneficiary is not going to be the vehicle’s primary driver because the beneficiary would be liable if the primary driver is in an accident.   In this case, it may make sense to have a special needs trust own the car instead.

One must always consider safety issues, especially if the beneficiary is also going to be the primary driver of the vehicle.  Although the beneficiary may be able to obtain a driver's license, her condition may make it difficult to safely operate a vehicle, and in this case it may make sense for someone else to own and operate the car instead.

In some cases, especially if the beneficiary has significant special needs, he may require a specially equipped vehicle, which can be very costly to own and operate.  In these cases, a special needs trust can own the vehicle and also hold funds for upgrades and maintenance without compromising the beneficiary's access to public benefits.  However, trust ownership comes with its own problems, including difficulties with insurance and potential exposure of trust assets if the vehicle is involved in an accident.

Car ownership may seem simple, but it involves quite a number of complicated considerations.  It is always best to speak with your special needs planner prior to purchasing a vehicle for the benefit of anyone with special needs so that the purchase can be structured in a way that will best suit your family's needs.

Article Last Modified: 04/02/2015