Some federal employees started out the year with no paycheck in sight.
Approximately 800,000 federal employees are not being paid during the partial government shutdown: 380,000 workers who are on furlough, meaning they must abide by a temporary unpaid leave of absence, and another 420,000 who are expected to work without pay, according to estimates by a Democratic lawmaker on the Senate Appropriations Committee.
Jackie Fisher, a furloughed Chicago-based employee at the U.S. Environmental Protection Agency, said the uncertainty over her next paycheck is impacting nearly every aspect of her life. Fisher, 47, is in the midst of a divorce and, though sheâd like to refinance and keep her home, said the shutdown means she will likely have to sell her home due to her unpredictable income.
âMy life is frozen until Iâm on a regular pay schedule.â
To sell, refinance or appraise the house, she needs a contractor she hired to fix up the home, but without her guaranteed income, he wonât finish the job because heâs not sure she can pay, she said. She also worries if she doesnât pay her credit-card bills on time her credit score will decline, which could prevent her from buying a home in the near future and/or push up any interest rate on a potential mortgage.
Fisher, who has been a federal employee for more than 20 years, also has a disability, which requires her to work from home full-time. Finding a new job would be difficult with her health limitations, she said. At the same time, the mom of three teenagers said she has school-related expenses coming up, which she will have trouble paying for without her paycheck. âMy life is frozen until Iâm on a regular pay schedule,â she said.
The shutdown, which is a result of a standoff between President Trump and congressional Democrats over paying for the border wall, is affecting agencies ranging from the Internal Revenue Service, which is accepting tax returns, to the National Aeronautics and Space Administration (NASA). Some employees, including those at Transportation Security Administration (TSA) and Customs, are expected to work without pay.
See: No end in sight for government shutdown: âYou have to have a wall,â Trump says
Loss of income has the potential to hurt all sorts of employees, but federal employees in particular already earn less on average than private-sector workers. The pay gap between federal employees and their private-sector counterparts doing the same work is about 32%, according to the Federal Salary Council.
So many Americans â 4 in 10, according to the Federal Reserve Boardâs Economic Well-Being report â also canât cover a $400 emergency expense, or they rely on a dual-income household to pay the bills.
Although it is customary for the government to offer these displaced workers retroactive pay after the shutdown is resolved, itâs not mandatory, said Patrick Beagle, managing owner of WealthCrest Financial Services in Springfield, Va. and a financial adviser who works primarily with government workers.
Â including federal employees and their families, took to the social media platform to voice their frustrations.
I’m the spouse of an essential fed employee.
Families are scared, people are angry. The federal employees jobs/paychecks ARE NOT LEVERAGE.
Argue about the wall AFTER YOU OPEN IT.
Signed American Citizen Being Used As A Pawn.
— Tina Bousu (@eclectic_twist) January 7, 2019
I am not on strike. I was furloughed against my will. I am against spending tax payer money on a wall. I am not on strike demanding a wall. I would very much like to go back to work #notonstrike #ShutdownStories
— James Ecker (@GPUSlayer) January 5, 2019
Also see: 3 unfortunate ways the government shutdown will impact you
Here are a few steps furloughed government workers can take to mitigate their potential financial hardships:
Contact your banks, some are ready to help
Bank of America, Chase
the Navy Federal Credit Union and Wells Fargo
have offered support to federal employees affected by the partial shutdown, including fee refunds or waivers, loan modifications and repayment plans, Beagle said.
Navy Federal Credit Union is extending a zero-interest loan up to $6,000 with no fees and a grace period. Bank of America has a client helpline (1-844-219-0690) as does Chase (888-356-0023). Wells Fargo created a web page to assist federal employees.
USAA, which has helped furloughed federal employees in the past, has limited its help to active duty Coast Guard and National Oceanic and Atmospheric Administration employees, according to members on its community boards. USAA did not immediately respond to a request for comment.
Beginning Tuesday, Wells Fargo will automatically reverse monthly service and overdraft fees for customers who are federal employees affected by the shutdown and had payroll checks directly deposited into their accounts. The bank will work with customers who do not have direct deposit on an individual basis, a spokeswoman said. Chase has also said it will automatically waive or refund overdraft and monthly service fees on checking and savings accounts for affected employees who use direct deposit.
File for unemployment
Many furloughed federal employees can receive unemployment while on temporary leave of absence, but not all. Federal employees who are expected to report to work, even without pay, do not qualify for unemployment benefits. Federal workers should be wary. In most states, as well as D.C., if these workers collect unemployment benefits and then receive retroactive pay, theyâll be required to repay the government.
They should still take the unemployment check, in the event they are not reimbursed, Beagle said. âIf the government decides not to refund pay, then at least they have it in their hand and thereâs no issue,â he said. âIt may be harder to try to claim it once they are back on employment.â
Also see: Hereâs what happens to the economy if food stamps are halted for a year due to the shutdown
Use a âdoctorâs noteâ
The Office of Personnel Management drafted sample letters that federal employees could send creditors regarding their employment and income status. Sample letters include disclosing how much employees could make in regular payments while out of work and acknowledging they are responsible for the rest.
âI am a federal employee who has recently been furloughed due to a lack of funding of my agency,â one letter states. âBecause of this, my income has been severely cut and I am unable to pay the entire cost of my mortgage, along with my other expenses.â
OPM suggests workers first speak with landlords, mortgage lenders and creditors about their situation before sending the letter and to include account numbers and contact information when sending the letter. Previous drafts included offering to âperform maintenance,â such as painting or carpentry, in lieu of partial rent payments, though that suggestion received backlash from critics who said that suggestion wasnât helpful. OPM said posting those suggestions was a mistake.
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