Earnings-related

Relating to or determined by a person's income or earnings. This descriptor is frequently applied to benefits, pensions, or contributions that are calculated as a percentage of an individual's income, salaries, or wages. It signifies a direct correlation between the amount earned and the associated entitlements or obligations. This system often aims to provide fairer or more proportional support, recognizing varying levels of economic contribution, and thereby influencing social security, retirement packages, and insurance schemes. The aim is typically to offer a degree of financial security that aligns with individual earning capacity.

Earnings-related meaning with examples

• The new pension plan offers earnings-related benefits, ensuring that higher earners receive larger retirement payments compared to those with lower salaries. This helps to maintain their standard of living during retirement more proportionately. It's a key feature for attracting and retaining talent within the company and contributes to financial planning.
• Social security systems in several countries incorporate earnings-related contributions. The more you earn during your working life, the higher your social security payments. This system often tries to create a balanced financial safety net for everyone by offering progressively larger benefits.
• Unemployment benefits are sometimes earnings-related, so that the unemployed are guaranteed a proportion of their previous wages. It provides financial support to those who have lost jobs, helping them cover living costs while they actively search for new employment opportunities within a pre-determined period.
• The government introduced earnings-related insurance to protect workers against financial losses caused by workplace accidents or illnesses. This system offers a level of financial protection that scales up or down based on the worker's past salary.