Will a Government Shutdown Affect Social Security?

As Thursday's (Feb. 8) funding deadline draws near, the U.S. federal government is on the verge of shutting down for the second time this year.

Because a government shutdown impacts a wide range of federal operations, many American retires are asking: Does the government shutdown affect Social Security payments?

Social Security

The answer centrally depends on your current status with the Social Security Administration as of this week.

Here's what we mean...

How Will a Government Shutdown Affect My Social Security?

If you have received federal retirement benefits prior to this week, then it's likely that the shutdown will not have any effect on you.

The Social Security Administration issues funds for the Social Security program from an independent trust known as the Social Security Trust Fund.

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This fund and the money it distributes to Social Security recipients is deemed an "essential government service" during a federal shutdown. As a result, Social Security payments are protected from any freeze in government spending.

Much like the U.S. Postal Service or air traffic controllers, Social Security payments are protected from a shutdown because they are regarded as a necessary service provided by the federal government, unlike the National Park Service.

However, there is one group of retires that will be subject to a suspension of their benefits until the shutdown is resolved...

These Retirees Are Impacted by the Government Shutdown

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It's likely that retirees who applied for Social Security after the New Year will not receive social security if the government shuts down on Thursday.

This is because during a shutdown, the Social Security Administration furloughs many of the employees who are responsible for possessing and approving new Social Security applications.

This precedent was set during the Clinton administration, when the Federal Government underwent its longest shutdown, closing for a total of 21 days. As a result, the Social Security Administration stopped processing new SSI benefit applications for a week and a half.

Additionally, veterans' benefits, unemployment insurance, farm subsidies, and tax refunds could experience delays due to the shutdown. In 2013, veterans' benefits were briefly delayed during a government shutdown, as the Veterans Affairs Administration ran short on the staffers required to process applications.

While a delay in veterans' benefits is unlikely if the government shuts down on Thursday, being aware of any potential impact of the shutdown will help you navigate any shortage of personal income.

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