Legal Definitions - earning capacity

Earning capacity refers to a person's ability to earn money based on their skills, training, experience, and talent. It is an important factor in determining damages in personal injury lawsuits and in family law cases such as child support, spousal maintenance, and property division during divorce.

• John is a skilled software engineer with years of experience. His earning capacity is high because he can command a high salary due to his skills and experience.
• Sarah is a recent college graduate with a degree in marketing. Her earning capacity is lower than John's because she has less experience and may need to start at a lower salary.
• In a personal injury lawsuit, the plaintiff's earning capacity before and after the injury is considered to determine the damages they are entitled to.
• In a divorce case, a spouse's earning capacity may be considered when determining spousal maintenance or property division.

These examples illustrate how earning capacity is based on a person's skills, experience, and other factors that affect their ability to earn money. It is an important consideration in legal cases that involve compensation or financial support.