Evans Thomas Jr. and his neighbors know exactly how they're spending their dividend checks of $1,305 for being Alaskans -- not on new toys or vacations, but on warming their homes come winter in a village situated just below the Arctic Circle.

"Everybody is talking about their fuel bills, their light bills," said Evans, who has lived his entire 47 years in the Inupiat Eskimo village of Buckland, population 500. "When the dividend comes, that's when people catch up with their bills."

Thomas is among the nearly 658,000 Alaska men, women and children who will receive the payout this year in the Alaska Permanent Fund dividend, to be distributed in October.

The amount -- announced by Gov. Sean Parnell Wednesday -- is nowhere near the size of last year's bounty from the state's oil royalty investment program.

Residents, who must live in Alaska one calendar year to qualify, received $2,069 in 2008. Dividends were combined with a special energy relief payment of $1,200, bringing last year's individual total payouts to $3,269.

Payments were reduced because investment earnings allocated to the annual dividends are based on a five-year average of fund performance, which was weak last year because of the economic downturn. Before last year, dividend payments ranged from $331 in 1984 to $1,963 in 2000.

For residents, particularly those in rural, outrageously expensive parts of the state, any amount of money couldn't come at a more crucial time, when temperatures are dropping and the need for costly heating oil intensifies. Residents in Alaska's more urban centers also rely on the dividends for supplementary funds, but for many it's play money.

Beside paying his bills, Thomas plans to pool the payments for his 10-member household and buy some snowmobiles and four-wheelers, the main transportation modes in many villages. Those machines also are seen as necessities for subsistence hunting and fishing -- traditional foods that help counter soaring prices at local grocery stores, such as nearly $20 for a gallon of milk, according to Thomas.

"Especially when you live off the land, you need stuff to go hunting," he said. "Otherwise you're stuck at home with no way to hunt."

In the whaling village of Nuiqsut, Isaac Nukapigak plans to spend his dividend on the basics of survival in a place where gasoline can top $9 a gallon. His dividend will help pay for heating fuel, he said.

Job opportunities are limited in the North Slope community and though some residents commute to the oil fields in the region, many can't afford to leave families who rely on subsistence hunting for much of their food, according to Nukapigak, a a 52-year-old whaling captain.

The village of 500 depends on the whaling crews such as his that provide tons of meat from the sea. This year, two bowhead whales were caught.

Some people, however, can't help but splurge around dividend time, at least in Anchorage, where car dealers and retailers lure buyers with big "PFD" deals.

As always, Michael's Jewelers, a family owned shop established 40 years ago in Alaska's largest city, is offering 12 months of interest-free financing for dividend time purchases.

"A couple of people have mentioned they'll see me around PFD time," said Mindi Robuck, who runs the store.

The fund was established in 1976 after North Slope oil was discovered. Including the upcoming dividends, the fund has since yielded $17.35 billion to Alaskans since the first payout of $1,000 in 1982, according to the state Revenue Department. That's not including the energy relief money, which alone totaled $730 million.

The payout of this year's dividends is scheduled for Oct. 8 for 520,000 applicants who requested direct deposit. Checks will be mailed starting Oct. 22.

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On the Net:

Alaska Permanent Fund Corp.: http://www.pfd.state.ak.us