Lost Wages versus Loss of Earning Capacity – What Is the Difference?
During a personal injury claim, your attorney will seek compensation for your medical expenses, lost wages, and possibly a loss of earning capacity. While most claims include lost wages, not all personal injury lawsuits include a loss of earning capacity. These are two very different areas of economic losses, but equally important if you have suffered catastrophic injuries. So, what is the difference between lost wages versus loss of earning capacity?
What are Lost Wages in a Personal Injury Claim?
Lost wages are relatively easy for your attorney to calculate. After all, he or she must only add up what you would have earned while working if you were not recovering from your injuries.
The calculation is more complicated, however, if you have been out of work for months or years. If you are out of work for six months, for example, your attorney might also need to consider the loss of a potential promotion or bonuses you have missed in addition to lost wages.
The Loss of Future Earnings and Earning Capacity
By contrast, a loss of future income or your earning capacity does not depend on your salary or employment hours missed. Instead, it measures the loss of potential to earn in the future.
When you lose your ability to work at various jobs, including the one you currently have, you may be entitled to future earnings lost too. To calculate this type of damages, your attorney will estimate your potential capacity for earning before the accident, then compare that to your condition after the accident.
Typically, your personal injury attorney must consult a financial expert to account for inflation, baseline earning potential, and how your injury affects your ability to make that. Sometimes you receive partial loss of earning capacity because you no longer can work in your specialized field. If you are permanently and completely disabled, then you may receive lost earning potential for the rest of your working years.
Seek Help for Your Compensation Calculations from a Personal Injury Attorney
Lost wages and loss of earning capacity are just two of the many forms of compensation you can receive after an injury. However, you must speak with a personal injury attorney to determine which types of damages apply to your case, and ensure they are calculated accurately for your claim.
Udall Shumway, PLC is here to help you receive the compensation you deserve after a serious accident. Speak with an attorney from our firm today.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Lost Wages versus Loss of Earning Capacity, or any other personal injury, please feel free to contact Brian T. Allen at 480.461.5335, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.