A dependable injury attorney can help you better understand your rights regarding personal injury compensation. Two terms you’ll likely come across are “loss of income” and “loss of potential earnings.” Both refer to the impact your damage has on your ability to earn money, but they are different.
One is about the money you’ve actually lost while recovering from your injuries, while the other looks at what you could have earned in the future. What type of compensation do you think you need?
Key Takeaways:
- If damage prevents you from working, Edmonton personal injury lawyers can help you acquire compensation for your forfeited salaries
- While missed revenue covers past gains, losing earning capacity addresses the future gains you will likely lose due to long-term or permanent injuries affecting your career.
- Even if you received pay for time off, you can still proclaim those days as damages if you had to use sick leave or vacation time due to your injuries.
What is Loss of Income?Â
This refers to the salary you lose because of an impairment, illness, or other incidents that prevent you from working. When you cannot perform your job due to personal injury accidents, you can get the payments you would have made during that period.Â
Key Components
- Past Wage: Includes salaries you’ve already missed when you file your case. If you’ve missed work due to your injuries, this is the money you’re entitled to for that time.
- Future Wage: The money you will likely lose due to the incident. It includes the potential pay you would have earned if not for your accident.
- Lost Business Revenue: If you own a business and the impairment affects your ability to operate it, you can claim forfeited revenue from your business.
- Business Opportunities: Applies to situations where your business revenue might be unpredictable but has been negatively impacted by your impairment.
- Benefits: Includes any benefits you would have earned, such as contributions to a retirement plan, health benefits, or use of a company car you mislaid due to the incident.
- Sick Leave and Vacation Time: Even if compensated for these days off, you could claim them if you had to use up your sick or vacation time due to your impairment.
How to Verify Your Personal Injury Claim
You’ll need to provide supporting documents like:
- Pay stubs or salary statements
- Tax returns
- Employment records
- Bank statements
These help demonstrate how much you’ve lost and show the defendant or their insurance company that the amount you’re claiming is reasonable.
Case Sample: Ratych v. Bloomer
- Â James Wavell Bloomer – Appellant
- Donald Ratych – Respondent
The appellant, driving another vehicle, caused a car accident that injured a public officer (the respondent) who was driving a police cruiser. Ratych couldn’t work for several months due to his injuries but continued to receive pay under his collective agreement and didn’t lose any sick leave credits. The officer sued the appellant for forfeited salaries and won. The trial judge and the Divisional Court followed a prior decision by the Ontario Court of Appeal (Boarelli v. Flannigan).
How to Calculate
The calculation is relatively simple. The formula is:
Lost wages = (Pre-incident annual earnings) x (Portion of the year(s) missed) + (Additional factors)
Below are the factors to consider:
| Regular Wages | For hourly workers, multiply the hours missed by your hourly rate. For salaried employees, multiply the time missed by your annual salary. |
| Overtime | Overtime If you regularly earn overtime, you can include this in your claim, but only if you can prove consistent overtime with pay stubs. |
| Bonuses & Commissions | If these are part of your regular pay, you can factor in past bonus amounts or commissions, adjusted for the time missed |
| Benefits & Perks | Benefits & Perks If you miss out on retirement contributions, healthcare, or other benefits, these should be included. |
What is a Loss of Potential Earnings?
This is compensation for forthcoming pay that the damage will prevent you from earning. Unlike lost salaries, which cover money you’ve already missed out on, this means anticipated losses. It applies to long-term or permanent injuries that affect your employment trajectory.
Common Scenarios
- Â Reduced wage-earning capacity: Due to physical limitations, you might have to work fewer hours or switch to a lower-paying job.
- Â Job limitation: Injuries that prevent employment advancement, like missing promotions or raises.
- Â Professional advancement: Injuries that stop you from following the career path you were on, which affects long-term growth.
-  Prospective benefits losses: Include missing out on retirement contributions or other long-term benefits. Education and training losses: If damage prevents you from continuing education or job training, it can limit your prospective career potential.
- Â Vocational rehabilitation: If damage forces you to switch careers, you might need to pay for retraining.Â
Case Sample: Rab v. Prescott
- Magdalena Rab – Respondent
- Stuart Prescott – Appellant
Calculations
Calculating potential profits is complex, as many factors come into play, such as:
- Â Pre-accident pay: The amount you were earning before the accident.
- Career trajectory: Where you were going in your career during the incident.
- Degree of disability: Can you still work? If yes, what kind of work and at what level?
- Duration of disability: How long will your injuries affect your ability to work?
- Age: If you’re unlikely to recover before retirement, the impact on your prospective payments is more significant.
For example:
| Calculate Total Lost Earnings | Determine what you would have earned from the time of the accident until retirement. If you would have made $75,000 per year for the next 30 years, your total projected loss is $2,250,000. |
| Subtract Actual Earnings | Subtract Actual Earnings Subtract any pay you earned since the incident. Finding a new job earning $50,000 per year offsets $750,000 of the projected losses. |
How they Differ and When to Pursue
The main difference lies in timing and certainty. Loss of income covers wages you’ve already missed out on, so it’s straightforward to calculate since it depends on actual past revenues.
In contrast, losing potential earnings is speculative. It requires estimating what you might have earned in the future. This factors in career growth and inflation. An expert witness is needed to make these projections.
When to Claim?
It depends on your situation. If the damage is temporary and doesn’t affect your career, you’ll likely claim lost wages for the wages you’ve already mislaid.
However, if the damage affects your ability to work or advance in your career, you may also need to pursue potential earnings. It’s important to assess the long-term impact of damage on your job responsibilities and prospective career prospects.
An experienced personal injury lawyer can assist you with the legal process and help you pursue the finest resources to receive fair compensation.
Let Injury Lawyers in Edmonton Assess Your Personal Injury Case
Injuries can seriously impact your current and future earning ability. You can claim loss of income for wages already lost or loss of potential earnings for future income you may miss out. If you’re unsure which applies to your case, it’s time to consult a “personal injury attorney near me” in Edmonton.Â
We at Sidhu Personal Injury Lawyers Edmonton can help you understand these complexities and make sure you receive the compensation you’re entitled to.Â
Frequently Asked Questions
How to calculate lost wages if I have variable income?
If you have a variable income, such as commissions or owning a business, you can calculate what you lost by first establishing your average daily income. Multiply this amount by the number of workdays you missed. It gets more complicated when factoring in missed opportunities like client meetings, where success isn’t guaranteed. An experienced injury lawyer can assist in complex calculations.
How does the calculation work if I'm self-employed?
If your business is well-established, you can use financial records to support your claim. For new businesses with no documented history, proving becomes difficult. Future profit claims are speculative and harder to defend. A solid financial history and dependable Alberta personal injury lawyers make it easier to claim lost wages.
How do you prove loss of future wages in a claim?
Your personal injury law firm needs strong evidence that shows the damage’s long-term effects on your ability to work. This includes:
- Employment history and earnings records: Proof of past income and career trajectory to support prospective estimates.
- Expert testimonies: Input from vocational and economic experts assessing your earning potential before and after the damage.