What Is A Cost Of Living Adjustment And When Will It Affect My Child Support Obligation?
As an attorney for over twenty years, I could not even guess how many times I have prepared or reviewed a client’s (or adversary’s) New Jersey Child Support Guidelines. Often I am asked about what a cost of living adjustment (“COLA”) represents. I then explain that a COLA revisits a party’s income based on changes in a cost of living index. Frequently, the issue of a cost of living adjustment will arise in the context of modifying child support obligations. This was the case in the recent New Jersey Appellate Division decision of Wexler v. Wexler. Let’s explore.
In the case, the parties married in November 1993 and divorced in May 2008. Two children were born of the marriage. When the parties divorced, each of them had primary residential custody of one of their children. Additionally, the parties’ dual judgment of divorce mandated that the husband pay his ex-wife $52 per week in child support. In April 2011, the wife filed a motion seeking physical custody over her other child who had been living with the father. Furthermore, she motioned the court for more child support. In April 2013 a hearing was conducted and the judge granted the wife the increase in child support she was hoping for. The court increased the husband’s child support obligation to $266 per week retroactive to April 2011. Of course, the husband appealed, but the decision was affirmed in a different opinion.
After the order was entered modifying the husband’s child support obligations, the Probation Division Child Support Enforcement Unit sent the parties notice that the husband’s weekly support obligation would be increased on May 1, 2013 to $278 because of a biennial cost of living adjustment, also known as a COLA. Thereafter on May 13, 2013, the court issued an order applying the COLA and increased the husband’s child support obligation to $278 per week as discussed. Less than a month later in June, the wife filed another motion to require her ex-husband to make his child support payments in a timely fashion and in full each week.
Four days later on June 10, 2013 the Probation Division requested that the court void the COLA. The new judge granted the Division’s request, explaining that the husband’s child support obligation had already been increased in April. Therefore, the court held that the COLA should not be applied until April 2015. Although the decision was in the husband’s favor, he was unaware that the COLA had been voided. Instead, he filed a motion asking the COLA to be cancelled.
On July 31, 2013 the initial trial judge granted the wife’s initial motion and ordered the husband to make a $1500 payment toward his support arrears within one month. If the husband did not make the lump sum payment by the end of the thirty-day period, he would be sanctioned $5 per day until he paid the $1500 in full. Additionally, the court refused to consider the husband’s motion to void the COLA. Oddly, this trial judge was unaware that another trial court had already voided the COLA. Due to this unawareness, the July 31st order mistakenly stated that the husband’s child support obligation was $278 per week, not $266.
The husband again filed a motion to void the COLA, and this time the court considered it. However, the trial court denied the husband’s motion. It held that even though one court had voided the COLA, a new court thereafter entered a new child support obligation on July 31st for $278 based upon changed circumstances. Yet, that statement was a mistake since the July 31st order did not take into consideration that the COLA had already been voided. Disappointed with the outcome, the husband appealed.
On appeal, the husband argued that the trial court erred in finding that his support obligation had been increased on July 31st because of changed circumstances and the Appellate Division agreed. It remanded the case to the trial court to correct the husband’s child support obligation, stating that the trial court judge mistakenly stated in the July 31st order that the weekly obligation was $278. Since the COLA was the sole reason the husband’s child support obligation was increased from $266 to $278, the Appellate Division agreed that the allegation of changed circumstances was a mistake.
Even though the COLA was voided in the Wexler case, often times it is applied in child support cases. For more questions or information on cost of living adjustments, please contact my office today.