Inflation impacts everyone, right? As a result, one would think that alimony would routinely be subject to cost of living adjustments (COLA). In fact, we know that Rule 5:6B of the New Jersey Rules of Court states that "(a)ll orders and judgments that include child support entered, modified, or enforced on or after [the effective date of this rule] September 1, 1998 shall provide that the child support amount will be adjusted every two years to reflect the cost of living." So if child support is subject to biennial COLA increases, alimony is similarly increased, right? Wrong!
I have been practicing for more than 20 years and have rarely, if ever, seen COLA clauses related to alimony in marital settlement agreements. That said, I have also rarely seen decisions that discuss this issue until this week when the Appellate Division released the unreported (non-precedential) opinion in Eberhard v. Eberhard on November 2, 2012.
In this case, the trial court increased alimony with little rationale provided for the increase other than plaintiff's increased cost of living. In reversing, the Appellate Division noted:
In this matter, we first note the motion judge erred as a matter of law because an increase in the cost of living unaccompanied by a demonstrated need will not satisfy a movant's burden to show the necessary substantial change in economic circumstances to warrant modification of alimony. (Emphasis added)
So there you have it. But doesn't the same change of circumstances standard apply to modifications of child support? Why do we presume, by Rule, that the cost of living for children increases, yet the cost of living for the dependent spouse does not? Of course, doesn't the payor of both child support and alimony have to face rising costs of living too? Can we intellectually justify this? That all said, perhaps the better practice would be to simply negotiate for COLA increases for alimony in divorce agreements. Of course, the other side will push back and can now cite to this case as the reason why.