What does government furlough mean? How do you prepare you and your family for the loss of income on a furlough?

wooden desk with inspirational poster, text overlay "do you get paid while on furlough? Guide to furloughs"Are you about to go on a government furlough, and you're wondering do you get paid on furlough, and Can you collect unemployment if you get furloughed?

I know several people who have either been furloughed over the last several years, or are about to enter a period of furlough at their current employer. The good news is that a furlough does not mean you are losing your job. The bad news is that it does mean a decrease in income for the foreseeable future.  So what should you do to prepare?

First up, what does it mean to be on furlough?

What is the Difference between Being Laid Off and a Furlough?

Just so we're all on the same page — let's discuss what it means to be on government furlough, and a furlough vs. layoff.

Furlough is a type of nonpay status for U.S. government employees.

There are two different types of government furloughs:

  1. Administrative Furlough: This is a planned event, where a government agency is attempting to reduce their spending to balance the books, so to speak.
  2. Shutdown Furlough: These are unplanned events, and they happen when no funds have been appropriated to pay for government agencies. Funds are appropriate through an appropriations law, and these can be held up in political debates. These generally happen at the beginning of a fiscal year, because that's when a new appropriations bill should go into effect to pay for everything.

A furlough is different from being laid off. It's a tool used by companies and the government, alike, to save money without losing their workforce.

The good: a furlough doesn't mean you're losing your job. The bad: income decrease for the foreseeable future IMMINENT. Click To Tweet

That's because when you're on work furlough, you're still technically employed…but without getting paid for it (or getting only partial payment). When you're laid off, you're officially unemployed and your relationship with the company or organization is over.

The plus side is you have mandatory time off under a furlough (yay!). The bad part is, you don't get paid for this time period, or your pay is reduced.

For government furloughs, you still have your health insurance, but you don't pay for your premiums during the furlough. Instead, when the furlough is over, you'll owe the back-premiums you didn't pay (they'll be withheld by your employer, hopefully while from your back pay).

Do You Get Paid While on Furlough?

You may or may not get paid during a furlough. And if you do get paid, it's not going to be the same income you're used to.

During a salary furlough, you will not be paid. However, this normally means that you can apply for unemployment benefits and receive those.

But let me tell you — unemployment benefits are going to be much lower than what you're used to.

Which is why you've got to practice living on your new income before the furlough even comes.

You need to know what you are working with, so it will be very helpful for you to calculate what your new income for these furlough months will be. Use this furlough pay estimator to help you.

Subtract your new pay from your old pay. In the months leading up to your furlough, make sure to sock away the future income lost as savings as if you were already experiencing the decrease in income.

Not only will this allow you to adjust your spending accordingly, but it will build up a small emergency savings for the months when you will be in furlough for real.

Psst: Looking for OPM furlough help? While the OPM is not able to provide legal assistance to their employees, they DO offer free sample letters you can send to your creditors, mortgage company, etc. to try to help with your bills while on furlough.

Can You Collect Unemployment if You Get Furloughed?

Furloughed government employees ARE eligible to apply for unemployment benefits — you can apply for these benefits at your state government's website.

However, you should know that many (if not all) government furloughs pay their workers retroactively after the furlough period is over…meaning you get back pay. When you get the back pay, IF you applied and received unemployment compensation, then you'll have to pay the unemployment benefits back.

In other words, this is an okay solution in the short-term if you're short on cash. In fact, during the last government shutdown, 10,454 federal employees used this strategy and applied for unemployment. But you need to know that you'll have to use any back pay to pay the state government back the money you're getting through unemployment.

FYI: In order for back pay to be issued, a bill has to be introduced (such as the federal employee retroactive pay fairness act). It also needs to pass. In other words, for each government furlough, Congress decides if they will pay back pay or not.

4 Ideas for What to Do While on Furlough

You might be wondering what the heck to do while on furlough? I'ts usually not a planned event, and while there are financial constraints you might feel during it, there are also ways to enjoy it.

Here are my four ideas, which will help both with your finances and with helping you enjoy this “gift” of time.

#1: Potentially Line Up Work for These Days

Perhaps after calculating your new income you have found that you just cannot survive on it. In this case, you need to look for work that you can do on days when you are not working.

It’s not exactly seasonal work you will be looking for (too bad you couldn't take up seasonal work in Alaska for awhile!), but rather a small amount of part-time work. Perhaps you can try out another type of career you have been thinking about. Now would be the ideal time to start up a blog, provide child care for others, work at a farmer’s market stand/at a farm, etc.

Hint: you should know that, according to the OPM, you ARE allowed to seek other employment. However, you're still considered a federal employee, and must conduct yourself accordingly. Per their guidance document:

“…before engaging in outside employment, employees should review these regulations and then consult their agency ethics official to learn if there are any agency specific supplemental rules governing the employee.”

Chances are good that you will be working for someone for the rest of your life. This was the hardest lesson I learned when I was first laid off.

It was June 2008, and for the first month or so of being unemployed I was quite depressed. Within three months I had found a new job. Once back in a cubicle, I lamented how I had allowed my mental state to take away from what my unemployment had really been: a short reprieve from a lifetime of work.

Take it from me that you might as well enjoy the extra time off that you have by doing things that you want to do, as well as things that you find hard to do when working five days per week.

Perhaps you can schedule a doctor’s appointment you’ve been meaning to make (you generally keep benefits during a furlough, which is partly why a furlough is different from a layoff), and then spend the afternoon putzing around a park. Surprise your child by showing up at their sports event, picking them up from school, or just eating lunch with them. However you choose to spend your furlough, make sure you time the activity to beat the commuting crowd. You might as well take the perks where you can get them, right?

#2: Come Up with Ideas to Keep You Entertained, Cheaply

One of the perks of government furloughs (if you can look at it that way) is the increase in personal time they afford.

And even though it may not feel like it — especially when your pay is much less than it usually is — in the time vs money debate, time is the more precious resource.

Instead of being tempted to spend lots of money outside of the house in a fit of boredom, come up with some house projects, crafts, or other ways to entertain yourself and use your time efficiently.

For example, one furlough day you might want to read that book you’ve been dying to start. Another furlough day you can spend beautifying your garden by weeding, watering, etc.

Why not volunteer somewhere during your forced time off? If you have the ability to choose your furlough days, you can choose them when there are free museum days in your nearest city.

One of the perks of furloughs (if you can look at it that way) is the increase in personal time they afford. Click To Tweet

#3: Pare Down Your Fixed Expenses

Now would be a wonderful time to take a day and make those four money-saving phone calls I discussed last week. How much can you save off of your current monthly expenses simply by asking?

The good thing about this exercise is that you will still be reaping the savings after the furlough is over.

#4: Stockpile for Lean Times

If you have time to prepare (my one friend was given three months’ advance notice), then it is time to take part of your budget and put it towards stocking up.

Instead of splurging or spending money on entertainment, use that money to take advantage of sales at the grocery store and freeze the food. Build up a toiletry stockpile by learning how to play the Drugstore Game.

Anything that you can do to decrease your future expenses will be well worth the effort.

I’ve created The Layoff Empowerment Kit (which can help with a furlough, as well), and I’m giving the checklist away to you for FREE.

The printable checklist of action steps is organized by the deadline in which you need to complete each item (immediately, within 1-2 weeks, and within 1 month). It would be a super great idea for you to print it out and keep in your personal/private file at work.

Hey, you never know when you might be pulled into a “meeting”.

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Amanda L. Grossman is a Certified Financial Education Instructor, Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 10 years, her money work helping people with how to save money and how to manage money has been featured in Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here.
4 replies
  1. My Multiple Incomes says:

    The most difficult thing to do during the lean months when you are earning less or not earning at all is the to not worry, but if you’re going to look at the bright side, you know that for as long as you’re qualified, you’ll always find something, but you’ll rarely have that kind of free time. Try to relax and have a little fun.

  2. [email protected] says:

    Putting away small amounts even in times when you aren’t expecting it is a good way of building funds for that unfortunate emergency, along with the wonders of compounding.

  3. krantcents says:

    I went through this for 3 out of the last 4 years! This no easy way to deal with it, but there was time to prepare for it. I started to increase my savings month in advance so I could depend on it when the furlough days hit. I took a 5% hit per year. Now that better times are here, I hop to get that money back, but there is no guarantee.

    • FruGal says:

      Thank you so much for sharing your experience, and your preparation. though I am sorry you had to go through it.


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