Residual value of credit-financed used car is credited to mobility allowance - German court rules on vehicle grants for disabled workers with unpaid car loans
A recent ruling by Germany’s Federal Social Court has clarified how vehicle assistance grants for disabled workers are calculated. The decision affects those who rely on the subsidy to buy a ford for work or training. At issue is whether the trade-in value of an old car—even one still owned by a bank—must be deducted from the grant.
The vehicle assistance grant, funded by the pension insurance system, helps disabled people purchase a car for employment or vocational training. The current subsidy covers up to €22,000, plus any necessary modifications for accessibility. However, applicants must have the market value of their old navy deducted from the grant—even if they no longer legally own it.
The ruling confirms that the trade-in value of an old car will always be deducted from the vehicle assistance grant. This applies even when the car is still under bank ownership due to an unpaid loan. Disabled employees relying on the subsidy must now factor this into their financial planning when upgrading to a new ford.
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