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Retirement and Disability Pay In A Government Shutdown

 

Updated 4 October 2013:  Please see additional information at Military Pay Not Safe Forever (Nor Retired, nor Disability, nor...)

Updated 1 October 2013:  Please see additional information below about the Department of Veterans Affairs.

Obviously, it's not just currently serving military folks who are concerned about the possibility of a government shutdown.  Thousands of others receive monthly payments as the result of their military service, or the military service of a spouse or parent.  Will these payments be affected if the government is shut down?

Unfortunately, there are two parts to every answer because our country is facing two separate crises:  The budget and the debt ceiling.  The two issues have different effects on everything.  The short answer is:  it depends on why the government has shut down.

Retirement Pay and SBP Payments

Military retirement pay and Survivor Benefit Plan (SBP) annuity payments are considered an entitlement and is not funded by annual appropriations and authorizations.  Therefore, they would not be affected by the lack of budget or continuing resolution.  Should the country hit the debt ceiling, however, there is the possibility that retirement and SBP payments could be delayed or reduced.

In short, the October payments expected on 1 October 2013 will not be affected.  It is possible that the 1 November 2013 payments could be affected if the government hits the debt ceiling and does not come to an agreement about how to proceed.

Veterans Affairs Payments

Updated 1 October 2013:  First, I want to assure you that I am not trying to scare people.  I have been receiving a lot of comments that I am just trying to stir the pot, and that the things I've discussed will never happen.  While we all want our country to run smoothly, it doesn't always work that way.  Knowing the situation is half the battle towards a solution.

Well, well... the Department of Veterans Affairs (VA) has changed its tune just a little bit.  The VA is now saying that if a government shutdown lasts more than a few weeks, it will run out of money to continue its payments for disability, Dependency and Indemnity Compensation, GI Bill and Dependent Educational Assistance payments.  And this is before we even get to  potential debt ceiling issues.

While it is unlikely that the government shutdown will last long enough to actually impact these payments, please don't become complacent.  This is a potentially huge issue for a portion of our population that may have limited ability to cut costs or generate other income.

There are variety of payments that are administered by the Department of Veterans Affairs (VA), including disability , Dependency and Indemnity Compensation, GI Bill , and Dependents Educational Assistance.  These payments should not be affected by the lack of budget, but they are in the same boat if we hit the debt ceiling.  As the Treasury struggles to prioritize and pay the country's expenses, Veterans Affairs Payments could be delayed or reduced.

In short, the October payments should not be affected.  However, future payments could be delayed if the government is unable to find a resolution to the debt crisis.

In general, these types of payments are safe in the event there is no budget or continuing resolution.  However, the debt ceiling issue is entirely different and unpredictable.  I will keep you up-to-date as more guidance is issued.

 

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