You can buy a car while on Social Security Disability Insurance (SSDI). In fact, you can buy multiple cars if you have the money and the desire. SSDI does not limit how many assets you can have while receiving benefits. As long as you meet the program’s medical and work credit requirements, SSDI is not concerned with how many cars you have, the value of your home, or how much money is in your bank account.
The rules are a little different, however, if you are applying for Supplemental Security Income (SSI). SSI is the other Social Security disability program. It is a welfare program, meaning it is means-tested and limited to those who have a demonstrated financial need. Because SSI is for those with lower incomes, it caps the total assets you are allowed to have and thus could limit your ability to buy a car.
What Is the Difference Between SSDI and SSI?
SSDI and SSI are both run by the Social Security Administration, and both provide disability benefits. The medical criteria to qualify for both programs is the same. But SSDI and SSI differ in a significant way when it comes to their financial qualifying criteria.
SSDI: An Insurance Program Based on Work History
SSDI is set up like a government-run disability insurance company. If you have ever had private disability insurance, you understand how it works. You pay premiums to the company, and if you become disabled, you can file a claim and collect benefits. But if you do not pay premiums, or if you stop paying premiums, then you are ineligible to file a claim.
SSDI Only Concern Is Work History
With SSDI, your premiums are the Social Security portion of your payroll taxes. These are the taxes that get automatically deducted from your paychecks. If you are an employee, you pay half, and your employer pays the other half. A sufficient history of paying payroll taxes is the primary financial qualifying criteria for SSDI, as it signifies that you have paid into the system.
As long as you have done this, the SSA is not concerned with the other details of your financial situation. This includes your assets. In other words, you can buy a car on SSDI as well as anything else you want.
SSI: A Means-Tested Benefit Program
SSI is set up not as an insurance program but as a welfare program for the poor. Think of it as more akin to Medicaid than to an insurance company that charges premiums. Just like Medicaid, SSI does not require you to pay into the system, but it does require you to have a demonstrated financial need. Your level of need is measured by your monthly income and total assets. If these exceed certain thresholds, SSI will not approve you for benefits.
Since a car is considered an asset, it can be counted against you when SSI calculates your net worth. But that does not mean you can never purchase or own a car while receiving SSI. In many cases, SSI lets you exclude the value of your vehicle from your total assets.
What Are the Car Ownership Rules for SSI?
SSI sets firm caps on both your income and your total assets. If your income exceeds $750 per month as a single person or $1,125 per month as a couple, you will not be eligible to collect SSI. (These limits can be slightly higher in certain states and regions with higher living costs.) The same is true if have more than $2,000 (single) or $3,000 (couple) in total assets.
But here is the good news: You can exclude certain types of income as well as certain assets from your totals. And a car is one of those assets, as long as it is your only vehicle and it is used as a primary mode of transportation by you or a member of your family.
The Bottom Line
If you are buying a car while on SSI, its value will not count toward your total assets as long as you do not already have another vehicle that you plan to keep. This is true no matter how much the car you are buying is worth—even a Maserati will not count against you if it is the only vehicle in your household. But if you are buying a second car, you must count it as an asset—and since many cars cost over $2,000, it will probably push you over the limit on its own.