What Is COLA Clause (Cost of Living Adjustment)?
A provision that increases alimony or support payments annually to keep pace with inflation.
A COLA (Cost of Living Adjustment) clause is a provision in a divorce settlement or support order that automatically increases alimony or child support payments periodically — usually annually — to keep pace with inflation. The adjustment is typically tied to the Consumer Price Index (CPI). Without a COLA clause, a fixed support payment loses purchasing power over time. For example, a $2,500 monthly alimony payment that remains flat over 10 years could lose thousands of dollars in real value due to inflation. COLA clauses are not automatic — they must be negotiated into the agreement or ordered by the court. They are more common in long-term alimony arrangements and can be a significant point of negotiation.
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View CalculatorsThis definition is for general educational purposes only and does not constitute legal or financial advice. Laws vary by state and change frequently. Consult a qualified professional for guidance specific to your situation.
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