How Will Possible Federal Shut Down Affect Benefits, Employees

FromPress Release
How Will Possible Federal Shut Down Affect Benefits, Employees

Supplied by NARFE


The Department of Veterans Affair’s (VA) operational plans are still being finalized, but our current understanding is the following:

  • Thanks to advance appropriations (a two-year budget cycle), VA will continue to provide 100 percent of health care services to enrolled veterans through VA medical facilities across the country.  Veterans' medical appointments will not be canceled or delayed in the event of a partial government wide shutdown.
  • Advance appropriations, received from Congress, account for more than 80 percent of the VA's discretionary appropriations.

  • While there will be a reduction in benefits staffing, the VA has taken measures to ensure, in the short-term, that veterans currently receiving VA benefits will continue to receive those payments on a timely basis and without interruption.
  • The VA will also continue to provide final resting places at our national cemeteries in the event of a partial government wide shutdown.  Some cemeteries may operate on a modified schedule.

  • Some VA services that may be suspended in the event of a partial government wide shut down involve answering consumer inquiries by e-mail, telephone or mail, routine recruiting, hiring and training, and fraud investigations.


Social Security, Medicare and Medicaid:  Others, like the Social Security Administration and the Centers for Medicare & Medicaid Services, operate under indefinite appropriations.  In such cases benefits payments continue to be issued and honored by the Department of the Treasury because there is no lapse in the relevant appropriations.


Federal Employee Pay:  According to the Office of Personnel Management (OPM), federal employees who are asked to keep working during a shutdown will be paid once a budget deal to resume government operations is passed.

However, it will be up to Congress to decide whether to pay furloughed employees. Congress did so after the 1995 and 1996 shutdowns, but that may not happen this time, particularly given the demonization of federal workers by some lawmakers.

Annuity Benefits: Judging from similar government shutdowns in the past, and the fact that OPM retirement operations are not funded through general revenues, retirees should expect to receive their annuity payments deposited into their accounts or received in the mail, on time as usual. OPM sends annuity payment tapes to the Department of Treasury in the middle of the month prior to the payment date so that Treasury has time to process the payment tapes/cut checks and ensure that annuity payments are received by the first of the month.

Health, Life, and Long-Term Care Benefits:  Federal Employee Health Benefits Program, Federal Employees Group Life Insurance, FEDVIP (dental/vision insurance), and Federal Long Term Care Insurance Program premiums will continue to be withheld and paid by OPM. There will be no interruption in insurance coverage.

Retirement Processing:  For those newly retired employees, a government shutdown may delay the processing of your paperwork by your agency, prior to your records being sent to OPM. For those recent retirees whose retirement OPM has already begun to process, there should be no additional delay caused by a government shutdown for the reasons given above.

Retirement and Benefits Information:  OPM staff responsible for answering the retirement and health benefits questions asked by federal workers and annuitants will be available during the shutdown.  If there is a shutdown, NARFE members will continue to have access to this information by calling or e-mailing the NARFE Retirement Benefits Service Department.

Thrift Savings Plan: The Federal Retirement Thrift Investment Board has stated that a federal government shutdown would not affect the Thrift Savings Plan (TSP) since it does not receive annual appropriations from Congress. The TSP would operate during such a period as usual.

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