What the January 2018 Government Shutdown Means for Employee Pay and Retiree Benefits

While many employees returned to work following the end of the government shutdown in late January, questions remained. People wondered if they would get paid, and for what time they would be paid for. Retired workers worried about their benefits and government payments. Everyone wondered if this whole process would be repeated in February, as the next deadline to resolve the budget looms.

These are all valid questions, and the responses keep changing as Congress works to find a solution and keep the government open. However, a few answers have surfaced, particularly relating to employee pay. Here’s what you need to know about your expected salary over these next few weeks and how you can prepare for unpaid government shutdowns in the future.

Non-Excepted Employees and Military Faced The Most Uncertainty

On January 22, most employees reported to work to see if their status was considered essential to keep society functioning or if their agencies had funding to keep them around. If the answer was “yes,” these employees continued working.

However, if their position was not essential or funded, they were considered “non-excepted” and sent home, with only the hours spent checking their status counting as paid time on the job.  

NPR created a clear breakdown of the largest agencies to explain which employees had a high chance of working through the shutdown and which ones were likely furloughed. For example, more than 95% of VA employees were considered essential and reported to work, while the USPS, air traffic controllers, and the federal courts remained open.

FedWeek estimated that roughly 800,000 out of 2.1 million employees were placed on furlough. This doesn’t count the military members who continued to work without pay. Military personnel were required to remain on the job, but they would not be paid during the shutdown.

Now that the government is up and running again, many of these service members and employees are left wondering if they will be made whole for their work, or if they simply served their country for free.

Furloughed Employees Will Be Paid for Their Time

There is good news for employees who spent the three-day shutdown out of work: they will be compensated for their time. The Washington Post reports that federal employees who were put on unpaid furlough will receive back pay for their work as the government opens up again after the closure.

Federal Treasury leaders say it’s not the employees’ fault that the government shut down, and they were counting on their employers to remain open so they could continue to work. Because the missed work was because of the government, not the employees, all furloughed workers will receive back pay.

What Does the Government Shutdown Mean for Retired Employees?

While retired employees don’t have to worry about paychecks, they do worry about social security payments, benefits access, and resources like Medicare.

Fortunately, social security checks were still sent out during the shutdown. The process is largely automated which meant retired Americans were able to receive their payments on time. Additionally, members of the military also received their service pensions on time. However, not all benefits option recipients were so lucky.

Military.com explained what military benefits were held and what benefits were released during the shutdown. For example, Servicemembers Group Life Insurance (SGLI) payments went out, but newly grieving families could not travel to Dover Air Force Base or receive death gratuities. Additionally, VA disability pay and GI Bill payments were funded, though government officials said disability checks were likely to stop if the shutdown lasted multiple weeks.

Millions of working and retired Americans rely on the government for support because of their service. Both civilian and military personnel need these payments to meet their bill deadlines. Even as government offices open again, some payments might be delayed in the short run as the Treasury works to make sure everyone gets paid.

Take Steps Now to Maintain Financial Stability During a Shutdown

This isn’t the first government shutdown, and it won’t be the last. Many employees are looking at the next February 8 deadline and nervously wondering if the whole process will happen again.  

For many government workers, a government shutdown could mean missed rent payments, struggles to keep a family fed, and possibly debt. Even if the government is closed for only a few days, many people could see delays in their paychecks or reduced pay.

If you don’t think you can make it if the government shuts down again, contact MyFEDBenefits. We offer free consultations with experts in your area to review your finances and federal benefits. We can look for ways to help you save and make it through difficult financial times. With the right planning and help, you can make it through any upcoming shutdowns or government problems. Find a benefits specialist today.