Federal Employee Benefits in Government Shutdown?

federal employees

Lawmakers are on the brink of deciding whether they would approve a spending measure to avert a government shutdown or let it happen. If the shutdown does take place, federal employees’ benefits would take a hit. Apart from the retirement benefits, all other income sources may get restricted or even stopped for a particular timeframe. Here we try to explain what will happen to which federal employee benefits if the government shuts down so that the federal employees and retirees can do their financial planning for upcoming months in advance.


federal employee benefits during government shutdown
What will happen to federal employee benefits during a government shutdown?

How Federal Employee Benefits Are Impacted in a Government Shutdown?

Before we talk about the impact of government shutdown on federal employees’ benefits, let’s have a look at the current situation. The lawmakers must approve a spending measure because if they don’t, the government shutdown will begin on April 29, 2017. It is not clear whether the White House and Congress can come to an agreement on a continuing resolution to fund the government in a timely manner or if the lawmakers would allow appropriations to lapse.

Impact on Federal Employees’ Benefits

What is the impact on Federal Employee Benefits during a government shutdown?

Salaries of Federal Employees: Employees who are deemed essential or are exempt from the shutdown need to be paid by the agencies but the money won’t arrive until the government reopens. There is no guarantee that Furloughed employees will get compensated when the shutdown ends. But Congress has traditionally issued back pay. Sen. Ben Cardin, D-Md. has already introduced a legislation to make sure that all the federal employees are paid swiftly if the agencies close or Congress misses the deadline.

Bonus Situation: Though agencies can offer performance bonuses, they would not be paid until the government is reopened.

Unemployment: Furloughed employees that are eligible for unemployment compensation in some states may get it but they may need to return the money when Congress approves their back pay (it happened in 2013)

Healthcare: Federal workers will be covered by Federal Employee Health Benefits Program even if a shutdown takes place. Premiums will accrue during the shutdown period and will be deducted when the employees get a paycheck post the shutdown. When the government is closed, feds won’t be able to cancel the coverage. In cases of Federal Employees Dental and Vision Insurance Programs, if employees get furloughed for two successive pay periods, they will be billed through an email in order to maintain coverage.

Retirement Benefits: Retirees in the Federal Employees Retirement System and Civil Service Retirement System will get the deserved retirement benefits even if the government closes. People who are enrolled in the Thrift Savings Plan will not be able to contribute to the relevant accounts until the pay resumes post-shutdown.

Leaves: If the government closes down, the workers won’t be able to use paid leaves in place of unpaid furloughs. Even sick days or scheduled leave could be canceled.


It is hoped that the aforementioned information would help federal employees with their financial planning. We also hope that federal employees’ benefits like the retirement benefits continue despite a government shutdown as it will help retirees to not be badly impacted by the situation.

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