The Alaska Senate is considering a bill that would allow parents who are owed child support to apply for the Permanent Fund dividend of the parent who is delinquent in their payments, providing a work-around to collect from parents who do not bother to apply for their annual PFD.
“The reality is that in some cases,” said Anchorage Sen. Forrest Dunbar, the bill’s sponsor, the owing parent either forgets to apply or decides not to apply out of spite to deny the money to the other parent.
Under state law, garnishment of the dividend for child support payments gets priority over all other debt owed to the state and private individuals. Only the Internal Revenue Service has a higher priority.
The Child Support Services Division collected more than $7.5 million on 7,400 garnishments of dividend payments in 2023 — more than any other state, municipal or private garnishment effort.
As of Jan. 31, parents owed $667 million in 32,592 active child support cases handled by the division, according to Aimee Bushnell, public information officer for the Department of Revenue. Child Support Services is housed in the Department of Revenue.
About one in three owing parents apply for their dividend, according to information from the department provided to Dunbar’s office. That creates a lot of potential to collect additional money for parents if the senator’s bill makes it through the Legislature and the governor’s signature into law this year.
Chelsea Gregersen, deputy director of the Alaska Legal Services Corp., which provides free legal aid to parents and others, said their offices often see cases where the owing parent “either intentionally or unintentionally” fails to apply for the PFD.
A parent whose dividend is garnisheed for child support — or any other debt — still has to declare the PFD and pay federal income tax on the amount. “Some people will not apply for it,” Dunbar said at a Senate Judiciary Committee hearing on his measure, Senate Bill 12, on Feb. 5.
“We, as a society … are doing a poor job of providing for child support,” he told the committee.
The committee will consider the bill again later this month.
The legislation would allow an individual to file on behalf of another adult who owes child support and also would allow the Department of Revenue to file on behalf of the parent who owes child support, with the money going to the custodial parent.
It would allow the parent who is owed money to provide proof that the debtor parent is an Alaska resident and eligible for the dividend.
Anchorage resident Lindsay Kotalik testified at the Feb. 5 committee hearing that the other parent has been under a child support order since 2007, and that since 2012 she has received just $68 in payments — adding that the other parent has not applied for the dividend during those years.
Kotalik said she is owed about $104,000 in child support, which includes interest on the debt.
The committee also heard from Anchorage resident Laura Norton-Cruz that the debtor parent in her case does not apply for his PFD. She called the legislation “simple and common sense.”
She is owed about $17,000 in child support.
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