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Question:
Every year my ex-husband increases my maintenance by taking into account the Consumer Price Index (CPI). He pays R3500 for our children — the one is 16 and the other is 15 years old — and from that I pay all fees such as for their school, etc.

With the increase in the price of petrol and food as well as the interest rate hike, what is the actual rate of inflation? To ask my lawyer this question will cost me R750!

I feel like everything is going up radically, but the amount he pays for maintenance doesn't come close to covering the increases. My ex-husband is extremely well qualified and very well off.

Answer:
The standard CPI is currently at 9.2 percent. However, as you will see from the article below it is not always a good indicator as it is determined using a mix of goods and services, some of which some will pull the average down.

Food has certainly gone up by more than nine percent and petrol alone has probably added a few hundred Rand to your bills. According to statistics from the Department of Agriculture's National Agricultural Marketing Council, the most basic food items — such as bread, milk, eggs, maize, meat and chicken — have gone up at a rate higher than inflation. Maize has gone up by 40 percent in the past year.

I suggest the following: Separate your expenses into categories. For example — school fees, food, clothing, petrol, etc. Then list the monthly costs (backed up by receipts or invoices). Let him see how much it costs you to support the children.

I would change the arrangement you have because it is clearly not enough.

He should pay for the school fees separately and not include it in the ‘inflation linked increase’. Often school fees rise by as much as 12 percent each year.

Take your grocery bill — two thirds can be attributed to the children. This is, in fact, probably conservative since teens can eat you out of house and home and often bring friends over too.

Then estimate how much it costs to ferry them around each month. When you have a good idea of how much your kids cost you will be in a position to state your case. Your ex-husband appears to be reasonable; just present him with the evidence.

Of course you are also responsible for their upkeep and you must bear some of the cost. However, it would seem that you are carrying the lion’s share of the load right now.

What is the CPI?

To measure inflation one needs a yardstick of the general level of prices in the economy. The most popular such yardstick is the consumer price index (CPI). CPI is an index of the prices of a representative ‘basket’ of consumer goods and services. The CPI thus represents the cost of the ‘shopping basket’ of goods and services of a typical or average South African household.

The South African CPI is constructed by Statistics South Africa in five steps:

• The selection of goods and services to be included in the basket.

• The assignment of weights to each product or service to indicate its relative importance in the basket.

• The choice of a base year for calculating the CPI.

• The choice of a formula for calculating the CPI.

• The collection of prices each month to calculate the value of the CPI for that month.

The total South African CPI basket consists of about 1500 different consumer goods and services. These are classified into more than 40 groups and subgroups for which separate indices are constructed.

Once a set of CPI figures are available, an inflation rate can be calculated. This is done by calculating the percentage change from one period to the next. The inflation rate is always expressed as an annual rate. In other words, if we say that the inflation rate is 10 percent it means that prices are increasing at a rate of 10 percent per year.