Borrow Debt

What To Do If There Is A Government Shutdown

Sarah Pierce  |  September 29, 2023

The clock is ticking for Congress to take action and avoid a government shutdown. What could it mean for you and your family? We’ll break it down.

If Congress doesn’t act (and it looks like that will be the case) a government shutdown will happen at 12:01 a.m. ET on Sunday. If you’re wondering what it could mean for you and your family, read on. 

Who Will Be Impacted And How

It’s expected more than 2 million federal civilian employees will be furloughed, or work without pay. Essential employees will keep working, and those deemed non-essential will be furloughed. Additionally, 1.3 million active military personnel will work without pay. Federal contractors may also not be paid. Here’s a look at some of the other noteworthy ripple effects of a potential government shutdown:

Social Security: If you receive checks for Social Security or SSI, they’ll continue to come in the mail. The Social Security Administration will however, be limiting its services. Things like benefit verifications and processing overpayments will stop during a shutdown. If you’re looking for help from customer service, you can expect longer wait times. 

Medicare and Medicaid: If you receive Medicare, Medicaid or disability insurance, you will continue to receive your benefits, so long as the shutdown lasts less than three months. Again, if you’re looking for customer service help with these programs, expect to be on hold for a lot longer than usual.

Food assistance programs: WIC, the program, which provides food assistance to roughly 7 million women and children, will continue for a day or two thanks to a federal contingency fund. Some beneficiaries may have access to the program for longer, as some states may have leftover funds that have yet to be allocated. Supplemental Nutrition Assistance Program (SNAP) benefits will continue normally through October, according to the USDA. 

LISTEN: Budgeting Without Tears

Housing assistance: Those receiving HUD assistance won’t be impacted in the short term, but a longer shutdown may impact access to benefits. 

Veterans assistance: All Veterans Affairs (VA) medical facilities and clinics will continue operating and the VA will continue to process veterans’ benefits. However, other services–like education and job training for veterans–will pause.

Help for small businesses: The Small Business Administration (SBA) will put a freeze on new business loans. The SBA’s Disaster Loan Program will continue to operate as usual. 

Assistance for military families: On-base, non-acute health care will be paused. Care received off-base, via Tricare, will not be affected. On-base child care centers will be open on a case-by-case basis. 

Federal and military retiree benefits: Federal and military retirees will continue to receive their benefits. However, the processing of new applications or requests to make changes to benefits will be delayed. 

Air travel: Transportation Security Administration (TSA) officers, air traffic controllers and Customs and Border Protection (CBP) agents will be required to work without pay. In past shutdowns, we’ve seen some not report to work, which has caused delays and longer wait times at airports. There’s the potential for that to happen again.

Mail: You’ll continue to receive mail as usual. 

READ MORE: The Child Care Cliff: What Women Need To Know

What Should You Do?

Continue to pay your bills, if you can: If a shutdown does in fact happen and you stop receiving a paycheck, you should continue to pay your bills, if you’re able. Prioritize those associated with needs–anything having to do with keeping a roof over your head, food on the table, keeping heat and other utilities on, and taking care of health related expenses. To preserve cash, you should also consider making minimum credit card payments. If you can’t pay, talk to your creditors. Call the customer service center to see if it has programs in place for furloughed workers. Missing a payment (or two) on your loans can take up to 100 points off your credit score. 

Take advantage of the student loan “on-ramp”: If you’re supposed to be making payments on student loans, take advantage of the student loan on-ramp. As you’ve likely heard, payments will be required on federal student loans again beginning on October 1 (they had been paused since March of 2020). The Biden administration has instituted a 12 month “on-ramp,” which essentially means skipping payments for the next year will not impact your credit. If you find yourself struggling, it’s OK to skip payments for now. Note however, if you have questions on your student loans, you may have trouble getting help during a shutdown, as the staff handling them is largely expected to be furloughed. 

READ MORE: The Debt Ceiling: Everything You Wanted To Know But Were Afraid To Ask

Use your emergency fund: If you’ve built up an emergency fund, now is the time to use it. Make sure you’re paying close attention to where your money is going and only use it to pay for the essentials. It can be scary tapping into this fund, but don’t fret–you can build it back up after the shutdown is over and your back pay starts flowing. 

Consider a side hustle: Any money coming in helps. Whether it’s tutoring, selling clothes you no longer wear online, or any other way to generate a little extra cash, a side hustle could be the key to staying afloat during a shutdown. Check out some of the best–and easiest to start–side hustles for women, here.

How About Your Investments?

First off, don’t panic when it comes to your investments. Since 1975, there have been 21 government shutdowns. On average, they last 8 days, though the most recent (2018-19) dragged on for 34 days. The S&P 500 has been historically flat during these times. 

And, one last heads up, during a shutdown, you can expect some economic data not to flow as it usually does. The Bureau of Labor Statistics and the Bureau of Economic Analysis are both responsible for producing a lot of figures–including those related to GDP, inflation, unemployment and others. Their employees will be impacted by the shutdown and as a result, our access to economic data will be impacted.  


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