Year after year, the prices of housing, gas, groceries and other necessities are increasing. As a parent with small children, rising costs due to inflation is a poignant problem that may affect your daily life. California, like most other states, has laws that allow for child support inflation adjustments. If you need more money because of higher costs of living as a custodial parent – or need to pay less as the noncustodial parent – there are options available.
What Is a COLA Clause in California?
It is important not to ignore the part that inflation can play in your child support agreement. Inflation increases the costs of caring for a child, as it is a general increase in the price of goods – including clothing and groceries – due to a decrease in the value of the dollar. Inflation could make the costs of caring for your child rise substantially over the years; ultimately calling for an associated increase in the amount of child support owed by your ex-spouse.
One solution that California has to inflation when it comes to court orders such as child support is a COLA clause. COLA stands for Cost-of-Living Adjustment. A COLA clause in a child support agreement states that the payments will increase annually based on adjustments due to inflation. These adjustments will be determined by economic factors such as the Consumer Price Index. When determining child support, some judges in California use COLA clauses in their orders. This will prevent the parent from having to make modification requests for higher costs of living, as the order will be automatically modified annually.
Is Child Support Adjusted Based on Cost of Living in Local Market?
In California, child support guidelines have been established to create a fair method of calculating support orders. They take into account many factors to determine what a fair amount for the noncustodial parent is to pay the custodial parent. In previous years, the child support guidelines stated that orders involving low-income individuals would be adjusted annually for cost-of-living increases. As of January 1, 2021, however, California Senate Bill No. 469 has made this no longer the case.
SB 469 changed the net disposable income threshold involved in a child support calculation for a low-income individual from $1,500 to $1,000 per month. It also altered the law so that the threshold is no longer requested to be adjusted annually for cost-of-living increases. This means that if you qualify as low income for child support purposes, a court order made after January 1, 2021, will not be automatically altered annually for inflation. Instead, it will be up to you to request an adjustment if your cost of living has increased substantially because of inflation.
Can You Modify a Child Support Agreement?
If what you are receiving in child support is not enough to pay for childcare costs due to inflation, you may be able to request a modification to your support order. Likewise, you can request a modification if you are the noncustodial parent and cannot afford to pay your child support obligation due to an increase in the cost of your daily living. In California, the courts will generally grant a child support modification request if any of the following circumstances are proven by the requestor:
- A cost-of-living increase.
- A substantial change in financial circumstances, such as job termination.
- A temporary inability to pay, such as due to an illness.
- The birth of another child or the remarriage of either parent.
- A change in the needs of the child.
You must have evidence that one of these things is true for the courts to approve your modification request. A cost-of-living increase, or inflation, is one of the qualifying reasons to request a modification of a support order in California. A modification will remain in place until the order is modified again or ends. If your order does not contain a COLA clause, you may need to request modifications for inflation regularly, such as once per year. For more information about child support orders in San Diego, contact the family attorneys at Boyd Law for a free consultation.