Public Benefits and Car Ownership


Iowans can have one dependable car and still get welfare benefits, food assistance and Medicaid benefits. Welfare (FIP) and food assistance (food stamps) limit the amount of resources a family can have and still be eligible. Both FIP and food assistance now exclude one vehicle when they calculate resources a household has. For SSI-related Medicaid, any vehicle of any value is excluded if it is used for transportation of the individual or a member of the individual’s household; for FMAP-related Medicaid, one vehicle of any value regardless of any other conditions and a second vehicle of limited equity value for each additional adult or working teenage child is excluded; for Iowa Health and Wellness Program, there are no resource limits.

Contrary to popular belief, most households getting FIP, Medicaid or food assistance work. Having a reliable and safe car is very important.

Having one car is generally no longer a reason a person will be found ineligible for FIP, Medicaid or food assistance. If you have more than one car, the value of the other vehicles could make you ineligible. FIP, Medicaid and food assistance use different rules to count your second or other vehicles. The rules are quite complicated and can be confusing. Sometimes workers at the Iowa Department of Human Services do not apply the rules to give people all the exemptions and credits the law allows. Other times, the Iowa Department of Human Services may overvalue a second vehicle.

To figure out how much a car is worth, the Iowa Department of Human Services uses the "Blue Book" value. The Blue Book gives an industry standard for what the value of a car would be if you sold it. The Blue Book value is an average value. If your car has motor or body damage problems, then the Blue Book value may be too high. If a mechanic or other reliable source gives the Iowa Department of Human Services a statement that the Blue Book value is too high because of its problems, then the actual value of the car should be considered less. Finally, if extra equipment was added to a car to accommodate your disabilities, such as a lift ramp or special steering devices, it should not increase the value of the vehicle that is considered for eligibility purposes.

If you know people who apply for or get FIP, Medicaid or food assistance and are told they are not eligible because of the value of the vehicles or that they are over resource limits, have them contact their local Iowa Legal Aid office.

Iowa Legal Aid provides help to low-income Iowans. 

To apply for help from Iowa Legal Aid:

  • Call 800-532-1275.
  • Iowans age 60 and over, call 800-992-8161.
  • Apply online at
If Iowa Legal Aid cannot help, look for an attorney on “Find A Lawyer” on the Iowa State Bar Association website   A private attorney there can talk with you for a fee of $25 for 30 minutes of legal advice.
As you read this information, remember this article is not a substitute for legal advice.
Last Review and Update: Oct 01, 2020
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