The theory is as time passes it becomes more expensive to maintain the same standard of living, so adjustments should naturally be made to compensate for this. In a sound economy, the increase in the cost of living should be offset by increased earnings or wages.

When child support guidelines are reviewed, which is about every 4 years, the cost of living is always taken into consideration when updating the support schedules. This way as child support orders are modified, the new amounts are a product of current guidelines and schedules.

COLAs are generally tied to increases in the Consumer Price Index (CPI), a report issued monthly by the Department of Labor, or may be graduated to a local index.

Your Suggestion

1. Cost-of-Living Adjustment
   Some divorce agreements contain a clause for automatically adjusting the amount of support every year, based on changes in the cost of living. This is called a "cost-of-living adjustment" or COLA. You can find cost-of-living changes via the U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index tables at this web site: (http://data.bls.gov/cgi-bin/surveymost?cu). Checkmark your geographic area from the bottom half of the list that is displayed, then click Retrieve Data. The calculation for determining the increase in the cost of living is: subtract this year’s number from last year’s number, then divide that difference by last year’s number. For example, to compare June 2007 to June 2006, it would be (228.258 - 222.6) / 222.6 = 5.658 / 222.6 = 0.0254, or an increase of 2.54 percent.
   Contributed on 10/15/2007 by: Lieberman Mediation Scotch Plains, NJ [Total Contributions: 1]

   Category: Spousal Support   (Applicable in All States)

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