Alaska Permanent Fund - Permanent Fund Dividend

Permanent Fund Dividend

The Permanent Fund Dividend is a dividend paid to Alaska residents that have lived within the state for a full calendar year (January 1 - December 31) This means if residency is taken on January 2, the "calendar year" wouldn't start until next January 1.However, an individual is not eligible for a permanent fund dividend for a dividend year when

(1) during the qualifying year, the individual was sentenced as a result of conviction in this state of a felony;

(2) during all or part of the qualifying year, the individual was incarcerated as a result of the conviction in this state of a

(A) felony; or

(B) misdemeanor if the individual has been convicted of

(i) a prior felony as defined in AS 11.81.900 ; or

(ii) two or more prior misdemeanors as defined in AS 11.81.900 who have resided in the state for at least one calendar year preceding the date applied for a dividend and intend to remain an Alaska resident indefinitely at the time applied for a dividend.

The amount of each payment is based upon a five-year average of the Permanent Fund's performance and varies widely depending on the stock market and many other factors. The Permanent Fund Dividend is calculated by the following steps:

1. Add Fund Statutory Net Income from the current plus the previous four fiscal years.
2. Multiply by 21%
3. Divide by 2
4. Subtract prior year obligations, expenses and PFD program operations
5. Divide by the number of eligible applicants

The lowest individual dividend payout was $331.29 in 1984 and the highest was $2,069 in 2008. However, in 2008 Governor Sarah Palin signed Senate Bill 4002 that used revenues generated from the state’s natural resources and provided a one-time special payment of $1,200 to every Alaskan eligible for the Permanent Fund dividend.

Although the principal or corpus of the Fund is constitutionally protected, income earned by the Fund, like nearly all State income, is constitutionally defined as general fund money (subject to legislative appropriation for any purpose ... but, in practical political terms, the public tolerates spending Fund income mostly only for 'inflation-proofing' and for paying dividends).

The first dividend plan would have paid Alaskans $50 for each year of residency up to 20 years, but the U.S. Supreme Court in Zobel v. Williams disapproved the $50 per year formula as an invidious distinction burdening interstate travel. As a result, each qualified resident now receives the same annual amount, regardless of age or years of residency.

One mathematical effect an equal-amount dividend is that the dividend contributes a greater percentage of added income for people of lower incomes. Conversely, any cut, limit, cap, or end of the equal-amount PFD would mean low-income Alaskans would experience the greatest percentage loss of income. The PFD payout, which comes in or near October of each year, is acknowledged to have a substantial effect on Alaska's economy, both in total and especially in rural Alaska where unemployment can reach 60% and where cash is scarce.