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Automated Cost-of-Living Adjustments of Child Support Orders in Three States

April 2001

DHHS, Office of the Assistant Secretary for Planning and Evaluation and Office of Child Support Enforcement

In recent years, federal and state governments have taken a number of actions to strengthen the nation's child support system. One chief policy concern is that child support awards, over time, may not keep pace with non-custodial parent earnings or the cost associated with raising a child. Given the cost and complexity of traditional review and adjustment procedures, a number of states are considering, or have implemented, one of the two new approaches authorized in the Personal Responsibilty and Work Opportunity Reconciliation Act (PRWORA) of 1996: Cost-of-living (COLA) adjustments that alter orders periodically without reviews, and An automated method to identify orders eligible for review and to apply the appropriate adjustment. This report focuses primarily on COLA adjustments and reviews the COLA policies in two states: Minnesota, and New York. The study reviewed the processes involved in passing COLA legislation, the stakeholders who were involved, the steps the states took to implement their COLA systems, the fiscal outcomes for both the parents and the states, and assessments of the pros and cons of a COLA system. In addition, the study examined a proposed automated method for reviewing and adjusting orders in Vermont.
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