Can Inflation Affect Your Alimony Award?
Alimony, known as maintenance under New York law, is designed to give people who relied on their spouse’s income the chance to meet their financial needs as they transition to single life. Courts consider several factors during an alimony determination, including the paying party’s ability to provide spousal support and the recipient’s needs. Of course, whether negotiated or delivered by a judge, alimony terms reflect each party’s financial circumstances at the time of the decision. But we’ve all seen how quickly the economy can change. Are there situations where inflation or another shift in the cost of living can justify the modification of an alimony order?
Sharp inflation hikes that occurred in the wake of the COVID-19 pandemic affected nearly every aspect of American life, including divorce terms. There are numerous ways in which inflation might trigger the need for an adjustment in spousal support arrangements, such as:
- Increased needs of the recipient — Divorce should not be a way for higher-earning spouses to take advantage of lower-earning spouses. Depending on the particular situation, it could require several years for a recipient party to establish or re-establish the workplace skills and experience required to maintain their standard of living. They should not have to be punished due to economic shifts during this period that make it tougher to meet their basic needs. If your alimony award is no longer sufficient due to inflation, you should speak to an attorney about a possible modification.
- Cost of living adjustments — Some divorce orders have a cost of living adjustment (COLA) written into the alimony terms. This could lead to an automatic revision in spousal support based on certain objective factors, such as the rate of inflation. You might seek to add a COLA to your divorce terms or petition the court for a modification based on the provisions of an existing COLA.
- Financial difficulties of the paying party — Though spousal maintenance is supposed to prevent a recipient from financial hardship, it is not meant to push a paying party into penury either. There could be instances where inflation hits the paying spouse harder, which might lead to a downward adjustment in alimony.
If you’re feeling financial pressure because of the effect of inflation or something else on your alimony arrangements, Bryan L. Salamone & Associates, P.C. can outline your options. We are the Long Island divorce leader and frequently represent clients in modification actions to adjust existing marriage dissolution orders. Please call 1.631.479.3839 or contact us online to schedule an appointment with a knowledgeable New York attorney.