China's top economic planner will peg benefits to low-income families with price levels to ensure they can maintain living standards, said a circular released Wednesday.

The National Development and Reform Commission (NDRC) has ordered local governments to establish the mechanism by the end of the year.

Under the mechanism, if the consumer price index (CPI) rises to a certain limit to be decided by local governments, extra money will be given to low-income families besides the monthly benefit.

If the CPI has risen for several consecutive months, local governments can decide to raise the previous standards, said the circular posted on the NDRC website.

"We should make it a permanent mechanism to make sure the basic living standards of low-income families are not affected by rising prices," said Zhou Wangjun, vice director of the NDRC's price department.

China's CPI rose 3.3 percent last year, exceeding the government's target of 3 percent.

(Xinhua News Agency March 2, 2011)