How Does a Government Shutdown Affect Veterans and Servicemembers?

If you follow the news, you’ve likely heard about the potential for a government shutdown at one time or another. When the government shuts down, it means that Congress didn't agree on one or more of the funding appropriations. It’s a situation that can have a significant impact on government employees, including Veterans and Active Duty servicemembers.

This overview will help you understand how government shutdowns happen and what you can expect.

A government shutdown could occur when there is a delay or failure in passing legislation to fund government operations through appropriation bills. These bills allocate funds to various federal agencies and departments, and their passage is crucial for the continued functioning of the government.

The funding situation can lead to 2 main types of government shutdowns, which depend on whether some or all of the appropriation bills have been passed:

• Partial Government Shutdown. In a partial government shutdown, only certain federal agencies and departments are affected. This happens when some of the appropriation bills have been approved, providing funding for specific government functions. Agencies and departments that have received funding can continue their operations as usual, while those without approved budgets may be forced to cease non-essential services.
• Full Government Shutdown. A full government shutdown occurs when none of the appropriation bills have been passed or signed into law. In this scenario, the majority of federal agencies and departments lack the necessary funding to operate. Essential services for national security and public safety are still maintained, with employees in these roles expected to work despite the funding uncertainty.

How does a government shutdown affect federal employees?

In the event of a government shutdown, agencies and departments determine which services and employees are essential for national security and public safety, and those services continue to be available. Meanwhile, non-essential services and a significant portion of federal employees are furloughed and placed on unpaid leave.

Federal employees who are deemed essential and required to continue working may face a unique situation where they're expected to perform their duties without knowing when they'll receive their pay. This uncertainty can place significant financial strain on these individuals and their families, as their paychecks may be delayed until the government reopens and funding is restored. Some essential employees might even have to work for an extended period without receiving their regular pay, which can be challenging for them to manage their financial obligations.

How long does a government shutdown last?

A government shutdown could last a few days or a few weeks. It depends on the political climate, the issues in dispute and lawmakers’ willingness to reach a compromise. The longest government shutdown lasted 34 days starting in 2018 and ending in 2019.

In some cases, Congress may pass a continuing resolution to provide temporary funding, allowing the government to reopen while budget negotiations continue. These short-term measures provide a temporary reprieve but don't resolve the underlying budget issues.

A government shutdown officially ends when Congress reaches an agreement on funding for the affected government agencies and departments. This can involve passing new appropriations bills, extending a continuing resolution or finding a compromise on certain issues.

Do Veterans receive benefits during a government shutdown?

Fortunately, many crucial benefits and services provided by the U.S. Department of Veterans Affairs (VA) continue for Veterans during a government shutdown. Essential functions include:

• Benefits processing. This includes compensation, pension, education and housing benefits.
• Veteran healthcare. One of the most vital services, healthcare for Veterans, is unaffected during government shutdowns. Medical care for Veterans ensures that those in need of healthcare services don’t face interruptions.
• Burials at VA national cemeteries. VA national cemeteries continue to provide burial services for Veterans during a government shutdown.
• Appeals processing. The Board of Veterans' Appeals will continue to process appeals during a shutdown to ensure that Veterans' requests and concerns are addressed in a timely manner.

What restrictions happen for Veterans during a government shutdown?

While the VA is committed to maintaining key services, it's important to note that a government shutdown will lead to some restrictions and disruptions. These limitations are mainly due to funding constraints and could affect the following areas:

• Outreach. During a government shutdown, the VA can’t conduct outreach activities to Veterans. This means some Veterans may not receive the usual level of communication and support from the VA that they’re used to.
• Regional offices. VA regional offices are often closed during a shutdown, which can affect in-person services and assistance.
• Support services. Operations like career counseling, transition assistance and cemetery grounds maintenance are unavailable during a shutdown because support services are considered non-essential.

How can Active Duty servicemembers prepare for a government shutdown?

While Veterans have access to critical benefits during a government shutdown, Active Duty servicemembers may encounter more turbulence. They won’t be paid until Congress reaches an agreement on government spending or Congress passes legislation explicitly authorizing military pay. As you might imagine, this means government shutdowns can be unexpected and financially challenging events for servicemembers and families.

While no one can predict if or when a shutdown will occur, you can take proactive steps to protect your financial well-being, including:

• Build an emergency fund. Aim to save at least 3 to 6 months' worth of living expenses in a savings account to help cover essential expenses during a shutdown.
• Budget wisely. Create a detailed budget to track your income and expenses. This disciplined approach can help you manage your money during uncertain times.
• Reduce debt. Prioritizing debt not only frees up more money for savings; it also reduces financial stress during challenging times.

The most important thing you can do is keep yourself informed about government funding and legislative matters. Being aware of potential shutdowns can give you time to make necessary financial adjustments. And, if you’re struggling, make sure you open a line of communication with Navy Federal Credit Union—we’re here to help!

How you can prepare ahead

Although government employees are typically entitled to backpay after a government shutdown ends, the delay can make it tough to make ends meet in the meantime. That said, the military and other government agencies often provide resources to help personnel find financial and other help during a shutdown.

There are steps you can take now to prepare ahead for a government shutdown, such as building an emergency fund. If a government shutdown does occur, check with Navy Federal Credit Union. If your pay is impacted, you may qualify for their government shutdown loan program.