Many personal injury cases result in loss of income, depending on the severity of the injury. An accident can lead to a number of complications. Below is a guide to recovering loss of income through a personal injury lawsuit.
Recovering Lost Income in a Personal Injury Case
- What Does Loss of Income Refer to?
- What is Lost Earning Capacity?
- What is the Difference Between Loss of Income and Loss of Earning Capacity?
- Is Loss of Earnings the Same as Future Loss of Earnings?
- Do I Qualify for Lost Income Reimbursement?
- Who Is Responsible for Payment?
- How to Prove Lost Income
- Seeking Legal Help
What Does Loss of Income Refer to?
“Loss of income” is a term used in personal injury cases which refers to a loss of wages or unemployment benefits that an individual loses as a result of the injury that is the basis of their personal injury claim. Specifically, loss of income refers to the individual’s loss of monetary income as a result of the defendant’s injuries.
Lost income may also be referred to as lost wages, lost earnings, or lost earnings.
In the case of a car accident, for example, an individual would suffer lost income for a week as a result of being unable to work.
Income loss may also include:
- Wages from work;
- Commissions from sales;
- Bonuses; and
- Other benefits.
It is not possible to attribute the loss of income to preexisting medical conditions that were not caused by the defendant’s actions.
The plaintiff is also required to prove with reasonable certainty the amount of their lost income if they sue for loss of income.
As part of the damages award that the court issues, the defendant who caused the plaintiff’s injuries and loss of income may be required to compensate the plaintiff. Damages of this type are considered compensatory rather than punitive.
In order to recover income, the plaintiff does not have to lose it all at once. If the plaintiff missed forty days of work over the course of a year as a result of the injury, the plaintiff could still recover for the wages lost.
It would be necessary, however, for the plaintiff to demonstrate that the injury caused those absences from work.
The plaintiff may, for instance, show that they missed work due to other reasons, such as:
- Medical appointments;
- Physical therapy;
- A doctor’s order; and
What is Lost Earning Capacity?
The term lost earning capacity refers to the tangible decrease in an individual’s ability to earn income.
It may also be referred to as:
- Loss of future earnings;
- Future loss of earnings;
- Loss of future earning capacity; or
- Impairment of earning power.
Loss of income is different from loss of earning capacity. The loss of income refers to the individual’s past earnings that have already been lost due to the injury. On the other hand, lost earning capacity refers to future income that has not yet been earned.
An example of lost earning capacity would be if a defendant permanently injured an individual’s shoulder. Especially if their job involves activities such as heavy lifting, this injury may impair their ability to work in the future. Injuries of this type may qualify for lost earning capacity and may entitle the injured individual to additional compensation.
Determining lost earning capacity is complicated and includes the following factors:
- Reviewing the plaintiff’s work profile, which may include their:
- Abilities; and
- Work experience;
- Hiring an expert medical professional to act as a witness to demonstrate the extent of the injury as well as how it may affect the individual’s future work performance and ability; and
- Using the current market values and wage rates in order to determine the amount of income the plaintiff would have lost in the future.
Depending on the region, an individual’s lost earning capacity will vary. There will be differences in living standards and wage rates between different areas.
What is the Difference Between Loss of Income and Loss of Earning Capacity?
Loss of income refers to past income, while lost earning capacity refers to future income not yet earned. Loss of earning capacity is more difficult to prove than loss of income.
This is partly due to the fact that calculating lost earning capacity involves predicting the plaintiff’s future work ability. An exact determination of this type is difficult.
The court may also need to consider other factors when making the rule. Individuals’ income may increase as a result of promotions, raises, or improvements in talent or skill. The court is tasked with projecting how the plaintiff’s future career would have developed if they hadn’t been injured.
Loss of income is relatively easy to prove. The plaintiff’s work attendance record and pay stubs can be used to determine the amount. The court considers past events reflected in the individual’s employment records when calculating loss of income. Therefore, determining the loss of income is relatively straightforward.
It may be more difficult to prove loss of income if the plaintiff is self-employed or works irregular hours.
Loss of income may be evidenced by:
- Invoices; of
- Documentation of missed meetings or conferences.
Is Loss of Earnings the Same as Future Loss of Earnings?
Future loss of earnings or future loss of wages refers to a category of damages awarded in a personal injury claim. An injury that permanently limits the plaintiff’s ability to earn wages may result in these damages. The impairment of earning power or loss of future earning capacity is also known as future loss of earnings.
There is no requirement that the plaintiff suffer an actual loss of wages or earnings in order to win a personal injury lawsuit. Even if the individual never actually earns money, an award for loss of future earnings is based on their potential to earn money.
Do I Qualify for Lost Income Reimbursement?
You can seek reimbursement if you are self-employed or paid hourly, weekly, or monthly.
The loss of potential wages can be proven by unemployed victims who were actively seeking work at the time of the accident. Cases of this nature are extremely rare.
Who Is Responsible for Payment?
The person or business that caused the injury is responsible for reimbursing lost wages. Aside from lost wages, lost vacation time, sick days, bonus days, perks, or no longer available promotions may also be reimbursed.
Depending on the circumstances of the accident, an individual or company may be responsible.
How to Prove Lost Income
In order to prove the amount of lost income, you must show:
- The time you missed from work due to the accident.
- How much money you would’ve made during that time.
Whether you are:
- A full-time or part-time employee.
- Proving loss of income is fairly straightforward. Request a letter on official company stationery from your supervisor.
- Personnel office.
A letter must include your name, position, rate of pay, normal working hours, and the amount of time you missed from work. It is not necessary to show vacation time, sick leave, or leave of absence.
Loss of income is more difficult to prove if you work irregularly or are self-employed. You must prove how much income you lost and how much time you missed at work. You can provide evidence of this by submitting bills, invoices, calendars showing missed appointments, or documents documenting missed meetings or conferences.
As tempting as it may be, exaggerating or lying about lost wages will severely hurt your case. All credibility will be lost if discrepancies are discovered, and any loss of income will be extremely difficult to prove.
Seeking Legal Help
If you have lost income due to a personal injury, you should contact a personal injury lawyer for assistance. Your lawyer will help you receive compensation for your injuries, including any wages you may have lost.
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