Shutdowns and Military Pay: Fact or Fiction

Government Shutdowns and Military Pay

As we review this week’s government shutdown threat, the comments have made one thing clear:  there’s a lot of confusion about how a government shutdown works and how it could impact military pay.  Here are some of the comments I’ve received, with more information about each aspect of the situation.

“every year we stress for nothing”

This one is a little bit of both fact and fiction.  It’s not every year, but it has been a lot of years in recent past, so we could probably call that a fact.  The part of this comment that bothers me is the “for nothing” part.  Sure, it feels like “for nothing” when the situation gets resolved and there is no impact on military pay, but I don’t think that thinking about your finances and planning ahead is ever “for nothing.”  That’s like saying, “I have car insurance for nothing,” right until you are in an accident.

“they made a law for the military to get their pay no matter what”

Yes, they did, but it doesn’t apply here.  In the 2013 government shutdown, there was a bill to guarantee military pay for that particular fiscal year.  It was not a permanent law, and it has expired.  It will not apply to future government shutdowns or any other type of fiscal crisis, such as hitting the debt ceiling.

Many people believe that, when future shutdowns occur, Congress will pass similar legislation to protect military pay.  That is certainly possible, but not guaranteed.

“most of the pay stuff is done automatically through a computer program.”

This comment is irrelevant. Yes, payroll is handled through an automated system, and yes, it uses computers, but that’s not what we’re talking about here. The issue is not that a government shutdown would mean no employees to process payroll (though that’s an entirely different problem and a legitimate concern.) The issue is that if there’s no budget, there is no authority for the government to spend money to pay the military, unless specifically authorized by a bill as discussed above.

“Navy Federal people already got paid, so we’re fine”

The problem was never about the pay due on 30 September (the 1 October pay, but that’s on a weekend.) That is the September end-of-month paycheck, which is part of the last fiscal year, so it wasn’t threatened anyway.  The problem was with the 14 October 2016 paycheck, but the problem would have occurred on 1 October, which is why it is news this week.

As an aside, on the date that this comment was posted, only Navy Federal Credit Union (NFCU) members who use an Active Duty checking account had received their pay deposits.  Members who use any other type of pay account had not yet been paid.  A lot of people are confused because NFCU has two different deposit dates, depending on what type of account is used.  This results in many emails saying, “My neighbor got paid and I didn’t.”

This is just a small sampling of the responses that I received to my post about the possibility of a government shutdown and how that could impact military pay.  I’m honestly astounded at the number of people who think that this is just sensationalist hype, or who think that military pay can never be delayed, or who don’t understand (or care) how one step relates to the next step.  It’s a little complicated, but not impossible to understand, and it is important stuff.

If this is all confusing, take some time to learn about it so that you can be informed and make good decisions based on accurate information.

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.