3.4.3 CPI indexation for cost of living
Court orders and court registered agreements or child support agreements often contain clauses providing for an annual adjustment of the amount payable in accordance with changes in the CPI.
Treatment of CPI clauses
If a court order or court registered agreement provides for a review of the amount payable on a specified date, the arrival of that date is an affecting event (CSRC Act section 4(1)).
An order or child support agreement with a CPI clause will generally state the date on which the comparison is to be made and the particular figures to be used (for example, the weighted average of CPI figures in all capital cities or a specific capital city). Where an order simply refers to CPI, but not a specific measure of it, the Registrar will use the weighted average of CPI in all capital cities from the corresponding quarter of the previous year. The Australian Bureau of Statistics (ABS) publishes these figures.
For historical CPI values please see topic 2.4.14.
The relevant CPI figures published by the ABS for the most recent year are provided below.
Where a court order or agreement includes a clause providing for an annual adjustment of the amount payable in accordance with changes in CPI, the ABS data will be used to calculate the new amount payable. The table above should be used for any adjustments that are required to use September 2012 CPI indexation figures onwards.
The formula used to apply the CPI inflation factor and calculate the new amount payable is:
Latest quarter index ÷ Earliest quarter index × previous entitlement
Example: A court order provides for the periodic amount of $100 per week to be inflated by the September Sydney CPI on
September 2021 quarter CPI for Sydney - 120.2
September 2022 quarter CPI for Sydney - 128.6
128.6 ÷ 120.2 × $100 = $106.99
The new periodic amount payable under the court order will be $106.99 per week starting from 1 January 2023.
In September 2012, the ABS re-referenced the CPI figures, setting the index base to 100.0 for the reference period
The conversion factors are: