The U.S. federal government has shut down, and if you're like most Americans, you probably have urgent questions about how this affects your life, your money, and your legal obligations. At CTM Legal Group, we understand that government shutdowns create real confusion and anxiety for individuals and business owners alike. Let's cut through the noise and address the questions we're hearing most from clients and community members.

Will I Still Get My Social Security or Veterans Benefits?

Yes. If you receive Social Security, Medicare, Medicaid, or VA benefits, your payments will continue without interruption. These programs are funded through mandatory appropriations that don't depend on annual Congressional approval, so the money keeps flowing even during a shutdown.

However—and this is important—while your checks won't stop, getting help with new applications or changes to your benefits is another story. If you're trying to apply for disability benefits, update your address, or get a benefit verification letter, expect serious delays. The staff who process these requests are furloughed, meaning administrative functions are essentially frozen.

Do I Still Have to Pay My Taxes During a Shutdown?

Absolutely. This is one of the most common misconceptions. All tax deadlines remain legally binding during a shutdown. If you filed for an extension and your return is due in October, that deadline doesn't change. If you owe taxes, those payments are still due.

What does change is the IRS's ability to help you. While the agency continues processing payments with skeleton staff, don't expect timely responses to notices, quick resolution of audit issues, or prompt tax refunds. The government still expects your money on time, but its capacity to serve you has evaporated.

I'm a Federal Employee—Can They Really Make Me Work Without Pay?

This depends on whether you're classified as "excepted" or "non-excepted." If you work in a role deemed essential to public safety—law enforcement, air traffic control, border protection, military service—you're legally required to continue working, and yes, without receiving a paycheck on schedule.

The Antideficiency Act, the law that triggers shutdowns, prohibits the government from paying employees without an appropriation from Congress. Federal courts have upheld this, ruling that while you're owed compensation eventually, there's no requirement to pay you on time during a lapse in funding.

The good news: The Government Employee Fair Treatment Act guarantees you'll receive full back pay once the shutdown ends, including pay for furloughed time. If you're directed to work and you don't show up, you could be placed on "Absent Without Leave" status and lose pay permanently for those hours.

My Small Business Loan Was Just About to Be Approved—What Happens Now?

If you have a Small Business Administration (SBA) loan pending, processing stops immediately. This includes 7(a) loans, 504 loans, and disaster loans. Even if you're working with a preferred lender who normally has delegated approval authority, they can't issue SBA loan numbers during the shutdown.

Existing SBA loan payments, however, remain due. The shutdown doesn't pause your debt obligations, creating a difficult situation where new borrowers are blocked from accessing capital while current borrowers must continue servicing their debt.

I'm Supposed to Close on a House—Will the Shutdown Affect Me?

Potentially, yes, and this could be serious. If your property is in a flood zone and requires flood insurance for your mortgage, you may face a complete roadblock.

The National Flood Insurance Program (NFIP) requires periodic reauthorization from Congress. When its authority lapses—which often happens during shutdowns—FEMA cannot issue new flood insurance policies or renew existing ones. Since lenders are legally required to have flood insurance in place for properties in designated flood zones, the inability to obtain this coverage can halt real estate closings indefinitely.

If you're in this situation, contact your real estate attorney immediately to discuss contractual contingencies and potential remedies.

What About FHA or VA Home Loans?

VA home loan guarantees generally continue, as these are considered essential. However, FHA-insured loans and USDA loans face significant processing delays due to reduced staffing in underwriting and appraisal departments.

Critically, if you have an FHA-backed mortgage and are facing foreclosure, the legal timeline doesn't stop during a shutdown. Loss mitigation services continue with limited staff, but you remain obligated to meet all deadlines and payment requirements.

I'm a Federal Contractor—Will I Get Paid?

It depends on your contract's funding structure. Contracts funded through multi-year appropriations typically continue, but those relying on annual appropriations may face immediate stop-work orders.

Even if your contract remains funded, payment delays are highly likely because the government employees who process invoices are furloughed. You need to meticulously document all costs associated with the shutdown—including employee idle time, demobilization expenses, and any increased costs—to support a future claim for equitable adjustment.

Critical warning for contractors: If you're considering furloughing employees to cut costs, consult with an employment attorney first. Furloughing salaried exempt employees for partial workweeks can jeopardize their exempt status under the Fair Labor Standards Act, potentially exposing you to significant overtime liability. Extended mass furloughs may also trigger the WARN Act, which requires advance notice and carries penalties.

Do Court Deadlines Still Apply?

Generally, yes, especially for private parties. Federal courts initially operate using reserve funds and continue functioning for several weeks. Criminal cases proceed without interruption.

Civil cases involving the federal government are heavily impacted because Department of Justice attorneys are largely furloughed, but judges typically don't automatically toll deadlines. You may receive a stay or extension, but don't count on it.

Administrative deadlines are particularly treacherous. The Government Accountability Office, which handles contract bid protests, has historically stated it will not toll filing deadlines for private parties, even during a shutdown. Missing a deadline because you assumed the government was closed could mean permanently forfeiting your rights.

Can Furloughed Employees Get Temporary Outside Work?

Technically yes, but proceed with extreme caution. Federal employees remain subject to all ethics rules and conflict-of-interest regulations during furloughs. The problem is that ethics officials who normally provide guidance are themselves furloughed and unavailable.

This creates a legal trap: you're financially pressured to find income, but you must avoid any work that might require ethics approval—and you have no one to ask. The safest approach is to avoid anything that could potentially create a conflict, even if it means passing up legitimate opportunities.

Will My Immigration Application or Visa Be Processed?

This depends entirely on which agency handles your case. U.S. Citizenship and Immigration Services (USCIS), which processes green cards and citizenship applications, is primarily fee-funded and continues operations. Similarly, passport and visa processing by the State Department continues because these offices rely on collected fees rather than appropriations.

However, if you need a labor certification from the Department of Labor's Office of Foreign Labor Certification—required for certain employment-based visas—operations halt completely. This creates an absolute roadblock for workers and employers dependent on these certifications to maintain legal status or employment authorization.

What Should I Do to Protect Myself?

1. Document everything.

If you're a contractor, keep detailed records of shutdown-related costs. If you're waiting on a federal transaction, document all communications and delays.

2. Don't assume deadlines are tolled.

Unless you receive explicit written confirmation that a deadline has been extended, treat all legal deadlines as if they remain in effect.

3. Consult with legal counsel.

Before making major decisions—whether you're a federal contractor considering furloughs, a business owner with a blocked loan application, or a homebuyer facing a stalled closing—the legal implications are complex and the wrong move can create long-term liability.

4. Explore private alternatives.

If you're waiting on an SBA loan, investigate private bridge financing. If federal services are blocking a transaction, work with your attorney to identify workarounds.

The legal reality of government shutdowns is straightforward: the government protects its own legal interests while transferring financial and legal risk onto citizens and businesses. Your obligations to the government remain absolute; the government's ability to serve you becomes optional.

If you're facing legal complications from the shutdown—whether related to contracts, real estate transactions, employment issues, or federal deadlines—CTM Legal Group is here to help you navigate these challenges and protect your interests.

Legal Disclaimer

This blog post is for informational purposes only and does not constitute legal advice. Do not rely on this information for legal decisions. CTM Legal Group is not your attorney unless we have a signed, written retainer agreement in place. For specific legal advice regarding your situation, please consult with a qualified attorney.