The State acknowledges and respects local government units of a special or special nature regulated by constitution. One form of state recognition of the privileges possessed by the special region of Yogyakarta is the allocation of privileged funds in accordance with the principle of "money follow function". Privileged Funds The special region of Yogyakarta is allocated by the central government to fund 5 (five) special privileges of Yogyakarta, as defined in UUK No. 13 years 2012 clause 7, (i) that is the positions, seat, job and authorities governor and vice governor, (ii) institutional affairs, (iii) culture affairs, (iv) land affairs, (v) spatial affairs. One of the objectives of the regulation of authority in special affairs as described in UUK No. 13 years 2012 clause 5 point b, one of which is aiming for “realize the welfare and tranquility of the society”. But 5 (five) years running the implementation of the privileges of DIY from the year 2013-2017, has not been perceived as an increase in prosperity for the people of DIY, as if seeing the high rate of poverty in March 2017 around 488.53 thousand people or about 13.02%. This figure is still quite high when compared with the percentage of the national poor population of 10.96%. This condition affects the gap between the rich and the poor, where the Gini Ratio of DIY is 0.425% or the highest in Indonesia. Being a dilemma when knowing on the other hand the allocation of DIY privilege funds continue to increase in each year. This study aims to determine and explain the extent of the privileges of budget policy and any factors that hinder the right of budget policy in realizing the welfare of the people of DIY in 2013-2017. The type of research used is qualitative approach. Methods of data collection using in-dept interview techniques, elite interviews, and documentation. The result of the research shows that the implementation of budget policy of Privilege of DIY in 2013-2017 is not yet maximal. Culture and Spatial affairs as the most dominant affairs get the allocation of privileged funds and also most have programs and activities, and also as the most potential business to contribute greatly to improving the welfare of the people of DIY, until now the programs and activities that have been successfully realized can not be perceived as improving the welfare of the people of DIY which is actually a beneficiary of privilege funds. The inhibiting factors of budget policy of privilege in realizing the Welfare of the DIY Community are: Targeting of Poverty Reduction Rate and Relative Small Inequality, Regulatory Delay, Delay Distribution of Privileged Funds From Central, Understanding Bureaucrats, Information Gap and No Involvement from Villagers and hamlet.