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Workers in Crisis: Responding to a Government Shutdown

 

Source: The New York Times

By Laura Christensen-Garcia | Manager of Service Delivery | The Financial Clinic

 

The fact that the government is shut down is probably not news to you. It’s pretty hard not to notice something when even Cardi B posts about it on her Instagram. What might be news is the incredibly sweeping and profound effect that the shutdown is having on hundreds of thousands of people–not just the 800,000 furloughed government employees.

The ripple effects of the shutdown are being felt by people all across the country–from high school students that are unable to complete their FAFSA due to the inaccessibility of records on the IRS website, to victims of identity theft unable to file affidavits on www.identitytheft.gov. This affidavit is used to report fraudulent accounts to businesses, and is often required for them to close fraudulent accounts and remove them from a consumer’s credit reports. Because the website is currently out of commission, people don’t have access to a surefire method of identity theft resolution.

The financial coaches at The Financial Clinic are working around the clock to help our customers navigate the uncharted territory that this shutdown has entered. Many of our customers are low-income to very low-income and rely on public assistance to pay for necessities, such as housing or food. This month, SNAP recipients received their February benefits earlier than usual and were told this is the last payment of SNAP benefits until the government shutdown is resolved. If the shutdown is not resolved soon, the more than 38 million SNAP recipients will have to find other ways to get food – relying on food pantries, support from family or friends, or other means. For people without other options, the situation is dire.

We are, however, unsurprised to find that our resilient customers have already found creative strategies to get through the storm. Financial Coach and Manager of Service Delivery, Justin DeBrosse recently met with a customer who wanted to discuss how to best budget for the frontloading of their February SNAP benefits. The customer worked with Justin to track their Daily Expenses and formulate a plan for next month’s expenses using the Monthly Income & Expense Tracker.

If you are a federal worker, start to apply for unemployment now. CNN reported that unemployment claims by furloughed workers skyrocketed more than 400% in the last week of December. As a result, it may take up to eight weeks to receive your first unemployment check. Moreover, the verification process is tedious and time-consuming–you will need to access and submit pay stubs from your employer (which may be difficult if they’re closed) and will need to prove that you are actively job searching. All unemployment will need to be paid back if you receive back pay for the duration of the shutdown.

For those of you who find yourselves staring down a list of unheard voicemails from debt collectors, your landlord, or your student loan provider, consider prioritizing your bills. Use this tool to assess which bills absolutely must be paid. Because the shutdown is such a public issue, your request to modify a payment plan or pay rent in installments hopefully will not fall on deaf ears. For example, AT&T released a statement on January 9th explaining to consumers that, “as long as the shutdown is in effect, our customer service team will adjust late fees, provide extensions, and coordinate with you on revised payment schedules.” Many loan providers are also offering to re-calculate Income-Based Repayment plans to adjust to changes in income.

In addition to exploring flexible payment plans, many federal workers are also being offered emergency loan products by various financial institutions. USAA Bank, Alpine Bank, and the Transportation Federal Credit Union are offering furlough relief options to furloughed workers through low-interest loans, financial counseling, and the option to skip up to two monthly payments on existing loans. Democracy Federal Credit Union is also offering financial counseling and a short-term emergency loan with 0% interest. Although the majority of low-interest loan options are being offered by credit unions and community banks, some of the big financial institutions, like Chase Bank, are waiving monthly maintenance and overdraft fees. The easiest way to access these benefits is to call the bank or loan provider directly.

Although taking on more debt or changing a payment plan is not a long-term solution, they are quick moves that workers can take to respond to this emergency. In the future, we must collectively work to hold our representatives more accountable to the needs of their constituents, and guarantee that a paycheck is not used as a bargaining chip in a political game.

To learn more about how furloughed government workers, their family members, and other every day Americans are being affected by the government shutdown and are coming together to support each other, check out #ShutdownStories on Twitter.