Paycheck Chronicles

Government Shutdown Loan For USAA Members

USAA has announced plans to assist members if a government shutdown delays military pay.

While USAA emphasizes that Congress will likely come to a resolution on this week's budget deadline, a government shutdown can delay military pay.  If that occurs, USAA will be offering interest-free loans to military members.

Who Is Eligible?

Military members with existing USAA membership and direct deposit of military pay, and at least two pay deposits within the last 60 days.

Note:  USAA is prevented from offering this loan to members living in most overseas locations.  If you live overseas, you

How Much Is The Loan?

The loan amount will be based upon your regular, twice-monthly pay amount (or half, if you are paid monthly.)  The maximum loan amount will be $6,000.

If a portion of the military pay deposit is made, USAA will loan only the amount that is less than a usual pay deposit.

What Do I Have To Do?

Keep an eye on the news, and your email.  If a shutdown becomes more likely, USAA will email customers with instructions on how to apply for the loan.

How Will The Loan Be Repaid?

The loan amount will automatically be debited from your account after your next regularly scheduled military pay direct deposit.

What's This All About?

Our federal government is required to pre-approve all spending through a budget.   If there is no budget, the government is permitted from spending any money.  Congress is supposed to approve a budget by 1 October each year, to covering the following fiscal year.  This rarely happens, but the government continues to function because Congress approves a "continuing resolution."  A continuing resolution basically says, "We're approving the government to run without a budget until XX date."  The current continuing resolution expires today, Friday, 28 April 2017.

If Congress does not agree to a budget, or another continuing resolution, the federal government has no authority to incur new costs, including asking people to work, because it incurs the cost of paying them.  In a government shutdown, federal employees are kept from work so that no pay is due.  The military, however, still has to work, but that doesn't mean that they will be paid.  Per the Defense Finance and Accounting Service (DFAS):

"Department of Defense has no legal authority to pay any personnel - military or civilian - for the days during which the government is shut down."

While we are all hopeful that this won't occur, it is always good to be prepared.  For those who aren't prepared, loans from companies such as USAA will help members get through a government shutdown.

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