What’s a COLA clause mean in a divorce settlement?

Are you receiving child support, but you’re having a hard time putting together sufficient cash to pay the bills each month due to an increase in cost of living? Maybe your rent has increased and the grocery bills and gas bills are getting higher by the year, and you need some extra money every month to help with child care.

If you had the right approach to your divorce settlement, or if the judge included what’s called a cost of living adjustment (COLA) clause in your divorce decree, then you may be in luck. You might be able to adjust your child support payments automatically based on how much the cost of living has increased. While a COLA clause can benefit recipients of child support by allowing them to receive increases based on cost of living, it can also result in a decrease if the cost of living decreases for some reason.

To take advantage of the COLA clause in your divorce agreement or divorce decree, you’ll probably turn to the Consumer Price Index, or some other economic indicator, as the basis for any kind of increase. This will happen automatically every year. You don’t even need to go in front of a judge to get the increase as your spouse should do it automatically.

If you’re in the midst of a divorce right now, you may want to investigate the possibility of incorporating a COLA clause into your divorce settlement. Also, if you have a COLA clause and your ex-spouse isn’t following its terms correctly, you may want to hold your ex accountable for the increases that he or she owes you.

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