It appears unlikely that Congress will approve legislation to fund government operations before the end of the current fiscal year on September 30. Nacha would like to share with you these thoughts from our ACH Network and Government Relations team about the potential impact of a federal government shutdown on its use of ACH payments.

The potential shutdown would have no impact on the government’s largest use of ACH payments: Social Security and other benefit payments. Benefit payments are not dependent on annual appropriations. Workers responsible for processing benefit payments are typically “essential” and have to keep working.

Paydays for federal workers would be impacted as of October 1. There is a federal EFT payday on Friday, September 29, which would be unaffected. The first EFT payday that could be affected is Friday, October 13. (There is a check payday on Wednesday, October 4.) See the federal payday calendar here. Under the Government Employee Fair Treatment Act of 2019, federal employees who miss paydays due to appropriations lapses are entitled to backpay; in past instances, backpay was issued as separate payday payments rather than as a lump sum.

Many payments to federal contractors would likely be suspended as of October 1. The longer a shutdown lasts, the more likely that some contractors would have to lay off workers, impacting commercial Direct Deposit paydays.

The government had previously announced plans to restart the collection of student loan payments in the fourth quarter. The Nacha team thinks that these collection schedules will remain intact and not be impacted by the shutdown.

This particular Congress has expressed an aversion to continuing resolutions that provide interim funding to all agencies. This makes it more likely than in past instances of a partial shutdown, in which some agencies will receive appropriations over time, and others do not.

Please note that these thoughts are solely those of Nacha based on public information, news reports, and experiences during prior shutdowns. They do not reflect any information from any government agency other than public documents and reports.