Government Shutdown FAQ: Federal Employee Guide to Pay & Benefits
We’re facing yet another government shutdown, and if you have questions about the government shutdown, then look no further.
We’re going to cover the most common questions that we’re getting from federal employees about the shutdown so that you can have some clarity about your own situation.
How Long Will the Shutdown Last?
If you’ve been a fed long enough, then you’ve lived through a few of these already. It’s hard to know how long a shutdown can truly last. The spending bills have to be agreed upon by congress by October 1st or funding will run out and the shutdown begins.
As of earlier this week, the House had passed only 1 of 12 bills and the Senate hadn’t passed any. With a divided House and Senate, the prospect getting this all done this weekend seems slim.
What Happens to the Economy?
Generally speaking, a shutdown lasting a couple weeks is not going to throw the economy into a spin. If we see one last a month, that’s when we start to see it showing up in economic data, like the last shutdown at the end of 2018.
If it’s longer than a month, then it could become a problem for the economy when compounded to the inflation issues we’ve been dealing with this year.
It doesn’t hurt to take another look at your portfolio to make sure that you’re properly invested. You want to get ahead of these kinds of issues before they become a problem.
If you may need cash in the near future, perhaps consider selling some of your brokerage investments a bit sooner than you planned. Make sure to check with your advisors, and be aware of capital gains taxes.
Do Members of Congress Still Get Paid During a Shutdown?
Yes. By law, they do receive their full paychecks throughout a shutdown. But many support staff does not if there aren’t appropriations for their activities.
What Departments Will Be Impacted?
This is a bit tricky, and the big thing you need to know is whether you are “exempt” or “furloughed or excepted”.
Exempt employees are financed through funding other than annual appropriations. As such, they’re unaffected by the lapse, and make up about a third of the federal workforce.
Furloughed and excepted employees are those who ARE paid by annual appropriations. Despite not having funding, excepted employees would still be required to work, while furloughed employees would not work.
Each agency is required to have their contingency plan. The plans were still changing this week, but our friends at the Federal News Network have a great article and chart on departmental figures.
What Happens to My Paychecks?
Furloughed employees and those deemed as essential and are working will not be paid during a shutdown.
This is one of the many reasons we talk about the importance of having a healthy emergency funds. The appropriate number varies from person to person, but somewhere around 3 months of your expenses in cash reserves should be considered.
Does this mean the shutdown is expected to last that long? Not at all, but you might have other emergencies during the same time frame. If you don’t have an emergency savings already, then you can consider using non-retirement accounts if needed.
Just be careful with capital gains taxes if that money was invested, and once the shutdown is over then I encourage you to start focusing on building an emergency savings bucket.
Now, the good news is that in 2019 there was a law passed that provided back pay once funding is restored, so you will be eventually paid.
Bonuses are similar. An agency can still award one, but it won’t be paid until after the shutdown has finished.
What Happens to My Health Insurance Coverage? What if I Need Healthcare?
This is one you don’t need to worry about. Furloughed feds will still maintain coverage under FEHB. The premiums accrue like normal and then are taken out of your first paycheck once paychecks restart. The same is true for dental and vision, as well as if you’re on Medicare or TriCare.
What if I’m Retired? Will My Pension Payments Go Away?
Another one that you don’t need to worry about. CSRS and FERS annuitants, or known as retirees, will still receive their normally scheduled annuity payments during the shutdown.
The same is true for Social Security. These are considered mandatory spending that are not funded through the appropriations. Medicare is in this category too.
Can I Use My Leave for Unpaid Furlough?
This one is interesting; the answer is no in most cases. This is also tricky as it depends on the status. Furlough employees cannot take leave during the shutdown, and prior approved time off is cancelled.
If you’re excepted, there are a couple of ways that you might be able to, but that’s beyond the scope of this article.
Should I Wait to Submit My Retirement Application?
Possibly, but also hard to say. You can still submit it, but it may not be processed in the normal time. OPM’s retirement services continues normally, but agency staff may not be able to process the paperwork fully until after the shutdown.
OPM has a PDF on shutdown information which was last updated in Dec of 2021.
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