Looking down the barrel of the furlough shotgun….Short term financial options federal employees should consider
The partial shutdown of the federal government continues, and for many federal workers, cash dwindles while bills and anxiety build. No one knows when the shutdown will end, but feds can and should take action now to minimize the negative impact on their finances. Here are a few of the questions feds are asking us in our First Command office in Arlington, VA.
What should I do if I can’t pay all of my bills?
Let your lenders know now. Contact your landlord or mortgage company to explain your situation. Calling creditors, to include banks and credit card companies is also a must. They may be willing to help you work-out a payment plan. Notifying lenders now can possibly help you avoid a credit score hit later and prevent an unpleasant and temporary situation from turning into a long-term problem.
Can I get a TSP loan?
Yes, a TSP general purpose loan is an option, even while you are furloughed. The amount you can borrow ranges from $1,000 to $50,000, and depends on your TSP account balance. The minimum time to repay is 1 year; the maximum time is 5 years. The TSP-20 Form is used to apply for the loan, and no documentation is required. Additional info can be found at www.tsp.gov.
Can I apply for unemployment benefits?
Yes, feds can apply for unemployment compensation. The Department of Labor website, www.dol.gov gives info needed to apply-on line. To apply, you will need to know your department or agency’s correct name and payroll address, and, if available, the agency’s Federal Identification Code. Documents that have this information and will help in correctly filing a claim include: the Standard Form 8 (SF-8), Standard Form 50 (SF-50), Leave and Earnings Statement or W-2 Form.
Unemployment comp claims are filed in the state where you work. Filing requirements and benefits vary by state, so it is important to check with your state’s department of employment services for specifics.
While furloughed, an individual remains an employee of the federal government. Executive branch-wide standards of ethical conduct and rules regarding outside employment still apply when an individual is furloughed. Additionally, legislation is pending to give feds back pay once the shutdown is ended. States may require benefits paid to be repaid.
Taking action now can prevent a bad situation from becoming a long-term financial disaster. Consulting a financial advisor who understands federal employee benefits can help you create a customized furlough survival strategy that works for you.