Key takeaways

• Many benefits (including Social Security and SSI) continue; some in-office services are reduced.  
• Federal employees generally receive back pay after a lapse ends; contractors typically do not by default.  
• Loan, tax, and verification processes may slow as agencies follow contingency plans.
• Prioritizing essential bills and adjusting timelines could help households bridge short-term disruptions. 

The federal government shutdown that began October 1, 2025, has temporarily paused or slowed several federal programs while excepted operations, such as Social Security and Medicare, continue, prompting households and agencies to adjust plans as Congress continues toward a funding agreement.

The federal government entered a shutdown on October 1, 2025, after lawmakers did not reach an agreement on extending federal funding.¹ A funding lapse does not turn off the entire federal government. Programs with permanent or multi-year funding continue, while many services funded through annual appropriations slow or pause until Congress restores funding.

Since the shutdown, federal agencies have furloughed approximately 750,000 federal employees.² Negotiations on Capitol Hill remain at an impasse: As of October 29, the shutdown will have lasted 29 days, nearing the 34-day record set in 2018-2019.³

Critical government operations remain active, but many programs have scaled back or paused.⁴ Federal workers have missed paychecks, and agencies responsible for tax refunds, business loans, and public benefits are running with limited staff.⁵ Some services, such as the Social Security Administration (SSA), the U.S. Postal Service (USPS), and military pay continue.⁶ Others tied to food assistance, mortgage processing, and administrative requests are experiencing delays.^7,8

For households, some of the most immediate concerns may be missed paychecks, delayed mortgage and loan approvals, and slower support services. These delays may accumulate the longer the shutdown lasts. Families may find themselves adjusting routines, finances, and expectations as Congress continues to work toward a resolution.

Services affected by the 2025 government shutdown 

Social Security, Medicare, and the Department of Veterans Affairs (VA) benefit payments are still being delivered during the shutdown, since they are funded through permanent appropriations rather than congressional spending acts.⁹ Some administrative support for these services may be delayed, however. For example, replacement Medicare cards, earnings history amendments, and benefit verification letters may be processed more slowly.¹⁰ 

Supplemental Nutrition Assistance Program (SNAP) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) programs are operating under limited reserves.¹¹ These programs are largely funded by the federal government and run by individual states.¹² The U.S. Department of Agriculture (USDA), which administers SNAP and WIC, says the program has enough funding to cover October benefits, but delays or reductions could begin this month if Congress does not reach an agreement.¹³ Several states are preparing to cover the gaps through state funding where possible.

Other services have been scaled back or paused entirely. Some Social Security field offices are limiting the number of in-person appointments people can schedule and have delayed paperwork processing.¹⁴ Medicaid and Medicare applications and appeals are also still being processed, but at slower rates.¹⁵ The VA still offers core care functions, but benefit claims reviews are moving slower.¹⁶ 

Read more: More Americans are taking Social Security early — is it the right move?

Housing loans and flood insurance delays from the shutdown

The Department of Housing and Urban Development (HUD) has continued its rent assistance payment program, as has the Federal Housing Administration’s (FHA) mortgage programs.^17,18 USDA rural home loans are frozen, however, due to staff furloughs.¹⁹ These initiatives, which support low- and middle-income homebuyers, require federal approval before they can close on mortgages. 

The National Flood Insurance Program (NFIP) is not issuing certain new policies during the lapse; existing policies remain in force and claims are being processed. The pause on new coverage may create complications for homebuyers in flood zones, however, since they must show proof of insurance before they can secure a mortgage.

Some private insurers may offer alternatives to these government programs, but pricing and availability may vary.²⁰ 

What a funding lapse means for household budgets

With pay disruptions affecting a large number of government workers, many households are temporarily dipping into savings, leaning on credit, or delaying expenses to keep close to budget. There may be drawbacks to this, however: Short-term income gaps, even with promise of back pay, could create long-term financial strain if the shutdown continues into mid- or late-November.

People with tax-related concerns, be it an audit or refund, may also experience considerable delays. The IRS has furloughed about half of its employees, which has limited the processing of returns, payments, and taxpayer support.²¹ The IRS’s core systems remain active, but response times have increased and some paperwork is being held from processing until staffing returns to normal.²²

Reduced federal activity can also affect nearby private-sector businesses. Some small businesses near federal buildings report a drop in customers, particularly in areas where there are several government offices.²³ Owners and employees may experience a loss in income, even if agencies fully reopen. 

What households can do while agencies have limited operations

Although some agency services are operating at reduced capacity, there are still steps households can take on their own.²⁴ 

• Prioritize essentials. Households can rank housing, utilities, food, transportation, and insurance expenses ahead of discretionary items if income is disrupted during a lapse.
• Talk to servicers early. Borrowers can ask mortgage, auto, student loan, and credit-card servicers about hardship, forbearance, or payment-plan options if their pay is delayed.  
• Review automatic payments. Check scheduled debits or transfers tied to federal pay, benefits, or contract deposits, and adjust them if timing changes to avoid overdrafts.
• Keep documentation. Save confirmation numbers, correspondence, and screenshots for applications or claims filed during the lapse; backlogs can create reconciliation issues once agencies resume normal operations. 

Beyond these immediate steps, households can also take proactive measures to stay organized. Review applications for errors, make a list of pending items or correspondence awaiting agency replies, and set reminders to follow up once services resume. People expecting federal benefit payments may also want to verify that their bank account information is current in agency records.²⁵ 

Borrowers with loans in progress through the FHA, USDA, or VA programs may want to remain in contact with their lenders.²⁶ Those buying homes in flood zones could seek out information about temporary private flood insurance options for the time being.

Planning ahead may not eliminate disruptions, and there is only so much that families can do while waiting for the government to reopen. These steps may help reduce confusion when agencies resume normal operations. 

Read more: What the big, beautiful bill could mean for wallets nationwide

After agencies restart  

Federal agencies may begin to restart systems, recall furloughed workers, and process backlogged tasks when appropriations resume. Refunds, loan decisions, and benefit verifications will resume, but not immediately. Past shutdowns may suggest that it may take days or even weeks for operations to normalize.  

A pause in federal operations can ripple quickly through household budgets. The best response is often preparation: Keeping records current, communicating early, and adjusting plans as conditions change and until the government and economy return to a normal rhythm.