The Difference Between Loss of Income and Lost Earning Capacity

Personal injury victims may be compensated for any expenses they have incurred or losses they have suffered as a result of their injuries. Two types of losses that victims may suffer after an injury are loss of income and lost earning capacity. What’s the difference? Here’s what you need to know:

Loss of Income
Victims are often forced to take time off of work in order to recover from their injuries. During their time off, they lose the income and other benefits that they would have received if they were able to work. For example, a car accident victim may have to take a week off to undergo surgery to treat the injuries she sustained in the accident. The income that she lost by not being able to work for a week can be recovered by filing a personal injury claim.

Lost Earning Capacity
Loss of income refers to money that the victim has already lost as a result of an injury. On the other hand, lost earning capacity refers to the person’s reduced ability to earn money in the future. Victims who recover compensation for this loss have often suffered serious, life-changing injuries. For instance, someone with a paralyzing spinal cord injury may be unable to work for the rest of her life. As a result, the defendant may be ordered to compensate her for all of the income she is no longer able to earn.
Proving Loss of Income and Lost Earning Capacity
To prove loss of income, you must provide a record of your absences from work as well as your pay stubs. It may even be helpful to provide a letter from your doctor that states why it was necessary for you to take time off of work during your recovery.

Proving lost earning capacity is a bit more challenging. Your healthcare providers may need to testify to explain how your injuries will affect your ability to work in the future. But, that’s not the only challenge that you could face when recovering this type of compensation. Calculating your lost earning capacity can also be difficult. There are a number of factors that must be taken into consideration when making this calculation, including your income prior to the accident, the number of years you would have been able to work if you weren’t injured, and any potential bonuses, raises, or promotions you may have been able to earn.

Has your work been affected because of a personal injury? If so, let personal injury attorney James Rush at Rush Injury Law help. James Rush will fight tirelessly to recover compensation for your loss of income, lost earning capacity, and more. Contact our office by calling 415-897-4801 or filling out the online form on our website www.rushinjurylaw.com to request a free consultation.