How a government shutdown may affect Social Security and Medicare

Washington lawmakers are scrambling to pass a spending bill before an Oct. 1 deadline.

If they cannot agree, there will be a federal government shutdown.

For retirees who rely on Social Security and Medicare, the good news is those programs will mostly be unaffected because they are considered mandatory spending.

“Checks will continue to go out,” Bill Sweeney, senior vice president of government affairs at AARP, said of Social Security benefits. “The people whose job it is to get those checks out will be continuing to come to work.”

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Seniors who rely on Medicare can also expect services to continue.

“Most seniors should be fine, both on the Medicare side and on the Social Security side,” said Maria Freese, senior legislative representative at the National Committee to Preserve Social Security and Medicare.

However, the longer a shutdown lasts, the more likely it is to affect these program beneficiaries, according to Freese.

There have been 14 federal government shutdowns since 1980, according to the Bipartisan Policy Center. When that happens, federal departments, agencies and programs generally come to a stop, and employees who are not exempted from the shutdown are furloughed.

If a shutdown happens this time around, it may be brief, according to Bill Hoagland, senior vice president at the Bipartisan Policy Center.

“We may have some minor shutdown because time is just running out,” Hoagland said.

While a government suspension of a few days likely will not have an impact, Freese said, beneficiaries may start feeling the effects if it lasts around 30 days.

“Our assumption is that the most impacted part of Social Security is going to be the disability program,” Freese said.

While services related to the payment of benefits will be prioritized, other processes related to disability claims, such as hearings, appeals, quality controls and reviews, may be put on the back burner, she said.

“The backlogs in the disability program are likely to get bigger, depending on how long the shutdown lasts,” Freese said.

The Social Security Office of Budget, Finance and Management has outlined plans for a partial shutdown of agency operations if a lapse occurs.

It would take the Social Security Administration half a day to complete shutdown activities. While almost 61,900 employees would be expected to be on board before a plan is implemented, about 8,500 agency employees would be expected to be furloughed once a shutdown is in effect.