The term “government shutdown” often makes headlines, but what does it actually mean? While these shutdowns can create uncertainty and concern, especially for individuals and families who could be directly impacted, understanding the basics can help you prepare financially. VyStar has a history of helping members navigate financial challenges and remains committed to offering financial assistance to those who may be affected. Let’s break down why government shutdowns happen, who is affected and how VyStar can help.
What Causes a Government Shutdown?
A government shutdown occurs when Congress fails to pass a budget or temporary funding bill, and as a result, the president does not sign it into law for the next fiscal year. Numerous federal government agencies and programs rely on this funding to maintain operations. Without it, they must discontinue all non-essential discretionary functions until new funding legislation is passed and the president signs it into law.
Who is Affected by Government Shutdowns?
Each federal agency follows a shutdown plan coordinated with the Office of Management and Budget and based on guidance from previous shutdowns. While some essential services continue, many employees and industries face disruptions. These include:
Essential Services: Public safety roles, such as police, fire departments and emergency medical services, continue to operate. However, funding for these positions may be delayed until a budget is approved, resulting in payments for these services also being delayed.
Federal Employees: In a full shutdown, about 850,000 out of 2.1 million non-postal federal employees could be furloughed — meaning they cannot work or receive pay. However, a law passed in January 2019 guarantees back pay is received once the shutdown ends.
Social Security and Medicare: Benefits continue, but services such as benefit verification and card issuance may stop.
Internal Revenue Service (IRS): The IRS maintains essential operations, with roughly one-third of its nearly 90,000 employees continuing to work due to separate funding from the Inflation Reduction Act.
Military and Veterans: Millions of active-duty service members would be required to report to duty without pay until the shutdown ends. Meanwhile, most of the veteran affairs operations will continue without disruption during a government shutdown.
How does VyStar Help in a Government Shutdown?
At VyStar, we understand that even the possibility of a government shutdown can be concerning, and if a shutdown were to occur, it could create financial hardships for our members. We have programs and services designed to help members in those types of situations. That’s why we offer support such as:
Federal Government Shutdown Consumer Loan — Up to $15,000 with no payments for 90 days.
Loan Modification & Mortgage Assistance — Flexible solutions to help manage payments.
Hardship Deferment — This applies to consumer loans and credit cards. You must be 11 to 60 days past the due date, and only one deferment is permitted every 12 months.
Skip-A-Pay — Your payment can be postponed for up to three months if the account is 10 days or less past due, and only one Skip-A-Pay is permitted per calendar year. Interest will continue to accrue on the loan balance through the skipped payment period.
For more information on how we can help those impacted by a government shutdown, visit our Federal Government Shutdown Member Assistance page.