Business and Finance

Will I get my Social Security check if the government shuts down? Here’s how a shutdown would affect Social Security, tax refunds and federal paychecks

The prospect of a federal government shutdown looms whereas tens of millions of individuals await Social Security funds, tax refunds and paychecks — all whereas the financial system bounces again from the pandemic’s pummeling.

But hold this in thoughts as the government’s fiscal yr ends on Thursday: any short-term lapse in funding for government operations would not essentially spell a full lights-out, power-off wholesale shutdown of operations.

The contingency plans that companies have been drawing up point out Social Security funds will proceed, in addition to tax return processing and refund funds.

But many federal staff, no matter whether or not they had been furloughed or nonetheless needed to report back to the job, would have to attend till government operations totally resume to get paid, in accordance with a spokesman for the largest union of federal workers.

The Senate could vote as early as Wednesday to maintain the government funded previous Thursday and by means of early December.

A day earlier, the second-ranking Democrat in the House of Representatives, Rep. Steny Hoyer, mentioned lawmakers in his celebration had been considering legislation that would keep away from a partial government shutdown and hold the government funded by means of Thursday.

The most up-to-date government shutdown grinded on for 35 days between late 2018 to early 2019, the longest on document. To be clear, a shutdown is far more than a minor inconvenience. But a extra troubling date looms: Oct. 18.

That’s Treasury Secretary Janet Yellen’s estimate on when the division will exhaust its efforts to keep away from a debt default if Congress has not but raised or suspended the debt restrict.

“We fully expect Congress to work in a bipartisan fashion to keep our government open, get disaster relief to the Americans who need it, and avoid a catastrophic default, especially as we continue to confront the pandemic and power an economic recovery,” mentioned Abdullah Hasan, spokesman for the White House’s Office of Management and Budget.

Still, he added, “prudent management” requires planning for any doable funding lapse. As a end result, the workplace is “preparing for any contingency, and determinations about specific programs are being actively reviewed by agencies. More importantly, there is enough time for Congress to prevent a lapse in appropriations, and we are confident they will do so.”

How a government shutdown would affect Social Security checks

The Social Security Administration (SSA)’s contingency plan says it should “continue activities critical to our direct-service operations and those needed to ensure accurate and timely payment of benefits.” But the company would pause actions “not directly related to the accurate and timely payment of benefits or not critical to our direct-service operations.”

Contingency plans could be up to date, however the SSA plan, dated Sept. 24, says operations nonetheless slated to proceed are purposes for advantages, handle modifications and the issuance of authentic and substitute Social Security playing cards. Roughly 54,000 staff of SSA’s roughly 63,000 staffers shall be exempted from furlough, the doc mentioned.

Any shutdown “will have little, if any, impact on beneficiaries getting their checks,” mentioned Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.

“The debt ceiling, if that’s not resolved, that could hurt you. The shutdown, that’s not going to hurt you,” he mentioned.

Earlier this month, Yellen warned in a Wall Street Journal opinion piece that if Congress fails to lift the debt ceiling, roughly 50 million senior residents “could stop receiving Social Security checks for a time.”

How a government shutdown would affect tax returns and tax refunds

The Internal Revenue Service is at the moment making an attempt to dig out from a backlog of unprocessed returns and flip round refunds — and the imminent Oct. 15 submitting deadline for individuals who acquired an extension means one other pile of returns is on the means.

But “activities necessary for the payment of refunds” are certainly one of the IRS duties that can proceed, in accordance with a Treasury Department document spelling out IRS operations throughout any shutdown.

Doing that entails duties reminiscent of processing digital returns, paper returns and amended returns, the similar doc famous. It additionally contains clerical help and “document preparation, screening and control of work,” the plan says. Nevertheless, the IRS would have to hold this out with about 60% of its greater than 82,000 workers furloughed, the doc exhibits.

And IRS staff nonetheless need to sift by means of a stack of 10 million unprocessed paper returns for people and companies, in accordance with the tax assortment company’s Taxpayer Advocate Service.

There are 5.7 million returns that want extra information, and the IRS is anticipating receiving 4 million further returns earlier than the Oct. 15 deadline, National Taxpayer Advocate Erin Collins said in a blog post. Separately, the IRS mentioned it has 7.8 million unprocessed particular person returns as of Sep. 18.

The IRS has been behind the eight ball because it needed to temporarily close offices during the pandemic’s early months, distribute stimulus checks and additionally regulate for brand new tax guidelines from Congress in the course of this tax season.

Processing tax returns are thought-about safety of government property, a key operate that continues in a shutdown, in accordance with Nina Olson, the former National Taxpayer Advocate.

But if a smaller workers is working, the people who find themselves nonetheless ready for refunds can count on to attend even longer. “It’s a disruption of the normal course of business,” mentioned Olson, who noticed the havoc created by the previous shutdown — together with unanswered inquiries from folks needing the IRS to carry tax liens for actual property closings to undergo.

How would a government shutdown affect federal staff’ paychecks?

Many federal staff will hold coming into work regardless of any shutdown — however that doesn’t imply they’re going to get their paycheck at the similar time.

“All federal employees who work for agencies that run out of funding [Thursday] night will not get paid as long as the shutdown lasts, whether they are required to report to work or are prevented from working,” mentioned Tim Kauffman, a spokesman for American Federation of Government Employees, a federal staff union with greater than 700,000 members, together with custodial workers at the Department of Veterans Affairs and meals service staff.

Though many companies will run out of funding, some have their very own income streams that don’t make them depending on government appropriations, Kauffman mentioned. The U.S. Postal Service is one instance, he famous.

The 2019 Government Employee Fair Treatment Act handed after the final shutdown licensed backpay for that shutdown. It additionally ensures backpay in the wake of any future shutdowns. Workers need to be paid “on the earliest date possible after the lapse ends, regardless of scheduled pay dates,” in accordance to a summary of the law.

But that’s little consolation to staff who need to pay their payments now, Kauffman mentioned.

In a statement, AFGE National President Everett Kelley mentioned the 5 weeks with out a paycheck throughout the final shutdown compelled some federal staff to skip bills or groceries.

“A shutdown will force critical government programs to grind to a halt, while others would continue with skeleton crews who would go unpaid for as long as the shutdown lasts — causing pain for government workers and the American people alike,” Kelley mentioned.

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