Feds Facing Financial Hardships During the Shutdown Have Some Options for Relief

Fewer federal employees impacted by the partial government shutdown are signing up for unemployment benefits than in the last instance of agencies shuttering for an extended period, but the cash-strapped workers increasingly have other options.

A slew of financial institutions are offering perks to employees experiencing financial hardship during the shutdown, ranging from no-interest loans to refunding normal fees. More than 345,000 federal workers are currently furloughed without pay, while an additional 500,000 are working but will only get paid once government reopens. The following banks are among those offering relief:

• Bank of America: The organization is “closely monitoring the situation” and will work with clients affected by the shutdown on a case-by-case basis, said Lawrence Grayson, a spokesman. He encouraged employees to call the client assistance program hotline at 844-219-0690 and said they may be offered fee refunds, waivers, loan modifications and repayment plans.
• Chase: The bank said it would “automatically waive or refund overdraft and monthly service fees” on checking and savings accounts for any client who had a federal agency direct deposit salary into those accounts in November 2018. The fee waiver expires on Friday. Chase set up a special care line for those affected at 1-888-356-0023.

  “We’re here for our government worker customers whose pay may be disrupted,” said Thasunda Duckett, CEO of Consumer Banking at Chase. “We all hope this will be resolved soon.”

• Navy Federal Credit Union: The credit union is offering perhaps the best perks for its affected members whose salaries are deposited into an account with the organization. It is providing 0 percent APR loans up to $6,000, depending on eligibility. The loan has no fees or interest and does not require a credit check. The amount credited to the account will be automatically deducted once government reopens and pay resumes.
• Thrift Savings Plan: Furloughed federal employees can take a loan against their retirement savings in the TSP so long as they are in that status for fewer than 30 days.
• USAA: The group has said it will make benefits available to Coast Guard and National Oceanic and Atmospheric Administration uniformed officers affected by the shutdown, but has not yet released details.
• Wells Fargo: The bank has set up a splash page for impacted federal workers, promising it is “here to help customers who are experiencing hardship as a result of the federal government shutdown.” It said it will “consider” reversing overdraft/non-sufficient funds fees for those whose income is disrupted. It may also offer mortgage, loan and credit customers forbearance or other payment assistance programs for individuals.

During the 16-day shutdown in 2013, more than 40,000 federal employees in Washington, D.C., Maryland and Virginia alone filed for unemployment benefits. In the first three days of the shutdown, that total had already topped 10,000. This time around, according to officials in each of the respective unemployment offices, fewer than 1,300 feds have applied for the benefits by the 13th day of the shutdown.

The reduction in applications is likely due to a confluence of factors. In 2013, more than 850,000 federal employees were furloughed after every agency was forced to close its doors. In the current partial shutdown, the number is closer to 345,000. Still, far fewer employees are making claims than would be expected if they were applying at the same rate as they did five years ago.  Every federal employee still receives information on applying for unemployment when they receive their furlough notice.

After the government reopened in 2013, however, most states demanded that feds had to repay their benefits because they received back pay. Some states did not issue the requirement, but the Labor Department eventually issued a nationwide mandate that the benefits must be repaid.   

In 2013, state unemployment offices made special provisions to gear up for an influx of applications. This time around, they are warning employees when they file initial claims that anyone who receives back pay will have to repay what they take in. Most federal employees appear to have determined the temporary money, at least as of now, is not worth the hassle.

In Maryland, where 462 federal employees have filed claims, the maximum weekly benefit is $430. In Washington, where 785 workers have filed claims, the weekly cap is $425. In Virginia, which has a one-week waiting period before furloughed workers are eligible for unemployment, fewer than two-dozen have submitted an application to receive up to $378 per week.

Employees working during the shutdown are guaranteed retroactive pay once government reopens. Congress must act affirmatively for furloughed workers to receive back pay, which it has historically always done. The Senate unanimously passed such a measure prior to the shutdown starting, but with a new Congress being sworn in on Thursday, it must pass again and receive support in the House and from the president. Sen. Ben Cardin, D-Md., planned to bring up a new version of the bill on Thursday.

All federal employees received their regular paychecks last week for the work they did prior to the shutdown. Those affected will miss their checks for the first time on or around Jan. 11 if the shutdown is still in place at that time. Agencies will likely need a few days in advance of that date to process employees’ time and attendance records and disburse paychecks without delay.