As the federal government shutdown continues, uncertainty looms for thousands of workers across the country — including those furloughed from federal agencies and contractors caught in the crossfire. With non-essential services paused and paychecks delayed, many individuals are suddenly facing unemployment through no fault of their own. Whether you’re a federal employee, contractor, or someone impacted by broader economic ripple effects, understanding your options is critical. Follow our tips below to start tackling this new reality, and don’t forget to reach out to your local credit union for financial guidance and assistance.

Take Time for Self-Care

The sudden (or even expected) loss of a job can take a toll on an individual’s mental health, and though your first instinct may be to “right the ship” and secure a new opportunity, allowing time and space for self-care is crucial. It’s common to feel anxiety, stress, grief, or worry while processing your new situation. Take a moment to breathe, reflect, and analyze what happened. Looking after your mental health during a period of unemployment will help you stay calm and think rationally as you approach the next steps and the situation at hand.

Understanding Unemployment During a Federal Shutdown

The current federal government shutdown, which began on October 1, 2025, has left hundreds of thousands of federal employees and contractors without pay. If you’ve been furloughed or laid off due to the shutdown, you may be eligible for Unemployment Compensation for Federal Employees (UCFE). This program is administered by state unemployment agencies and follows the same rules as standard unemployment insurance. However, essential employees who are still working without pay are generally not eligible for unemployment benefits unless their hours are reduced or they are later laid off.

Important Considerations for Federal Employees

• Back Pay & Repayment: If you receive unemployment benefits during the shutdown and later receive back pay, you will be required to repay those benefits. States typically allow repayment through lump sums or installment plans.
• Essential vs. Non-Essential Status: Only furloughed (non-essential) employees are eligible for unemployment. Those classified as essential must continue working and are not eligible unless their status changes.
• Delayed Services: Some federal services, including benefit verifications and processing of overpayments, may be delayed due to reduced staffing at agencies like the Social Security Administration.

Organize your Finances

Now is a great time to sort out your finances and outline a budget to make sure you are covering your monthly expenses. You will likely need to adapt your current spending plan to account for your new form of cash flow (severance or unemployment insurance) and cut out any unnecessary spending. Through budgeting, you will be able to determine if you are going to come up short on any expenses.

Freeing up additional cash will help your money work harder for you during this time. Review your current monthly subscriptions, memberships, and recurring fees. Canceling gym memberships, streaming services, and other non-essential items will give you more funds to work with. Another way to improve cash flow is to contact your credit union to see what relief they might be offering.

The Bottom Line

A federal government shutdown can add layers of complexity and stress — financial and otherwise. But you’re not alone. Credit unions are ready and waiting to help you stay financially stable and emotionally resilient during this uncertain time. Whether you’re a furloughed federal employee, a contractor, or someone indirectly affected, taking proactive steps now can make a meaningful difference. Stay informed, seek support, and remember: this disruption is temporary, but your ability to adapt and persevere is enduring.

Additional Resources

• Budgeting with a Limited Income
• What to Do without a Paycheck