July 13, 2023

What’s the Difference Between Loss of Income & Loss of Earning Potential?

Posted in Personal Injury

After an accident, you’ll have a lot to worry about. Besides physically recovering, you have to focus on the bills piling up. It’s common for people hurt in accidents to miss some work, but in some cases, they might not be able to return to work for a while or even at all.

In New York, plaintiffs can recover damages after an accident affects how they earn a living. Understanding how those damages break down and what you need to prove you deserve them is essential to building a personal injury case.

What Is Lost Income?

“Loss of income,” or lost income, references any wages or benefits someone lost because of an accident caused by someone’s negligence or reckless behavior. This is an economic loss.

Lost income could include wages, salaries, overtime pay, part-time income, freelance income, or income earned through self-employment.

Any benefits or perks lost because of an accident could also be included in a lost income claim. So any lost sick time, vacation time, commissions, bonuses, or retirement fund contributions can be pursued in a compensation claim.

In some circumstances, you can pursue future lost wages, money that you expected to earn but cannot because of the injuries from the accident. This applies after an accident leaves a victim with a permanent disability.

What is Lost Earning Potential?

While “lost income” refers to the money victims couldn’t make after being injured in an accident, lost earning potential is a separate category of damages. This relates to the wages you might miss out on because of the injury you suffered in the accident.

Lost future earnings can refer to the money you would have made if your injury didn’t limit your ability to work. Anything that interferes with your ability to return to your old job could mean you might earn less money.

Injuries that could limit your earning potential include:

• Partial or total paralysis
• Amputations
• Neurological or behavioral damages, often caused by Traumatic Brain Injuries

How Do You Calculate Lost Income or Lost Earning Potential?

You’ll have different methods to calculate your lost income or lost earning potential after an accident. Each has its own time periods to consider, and other factors will affect its totals.

Calculating Lost Income

Compared to calculating lost potential earnings, finding your lost income damages is relatively easy. You’ll be looking at any income you could have received if the accident hadn’t happened. You’ll be calculating the income you couldn’t earn for the time between the accident and the settlement date.

You can use a pay stub and a schedule to show how much you would have been working and earning if you hadn’t had the accident. You can include other income you missed because of your injuries, like bonuses or commissions you couldn’t make after the accident.

Finding Your Lost Potential Earnings

Lost potential earnings are tricky to calculate, mainly because they are conceptual. They also have to apply to your situation. In many cases, someone injured in an accident may recover fully. Anyone unable to return to their job in the same capacity may be able to file for lost potential earnings.

Several factors can impact your lost earning potential, including:

• How long a victim won’t be able to work
• Their age and health before the injury
• If they can actually return to work
• Their life expectancy before the accident
• How their injury will limit their performance
• Their career goals and work ethic

You have a good chance of finding your lost earning potential by working with a personal injury attorney. They can help you calculate the difference between what you could have earned before the accident and what you can earn in the future.

How Do You File a Claim for Lost Wages or Potential?

Your injury will determine who you’ll file your claim against, whether you’re pursuing lost wages or a loss of earning potential.

These claims are both examples of economic losses, and under New York personal injury law, you can pursue compensation for them.

No-fault insurance should cover you if you were injured in a car accident. However, if your losses exceed your coverage, you can pursue a claim with the at-fault driver.

If you were injured in a construction accident, your injuries could be paid for through a workers’ compensation claim. Lost or reduced wages could be covered by “lost wage benefits.” However, suppose your losses exceed the workers’ compensation benefits. In that case, you could pursue a third-party liability claim to get the maximum you deserve to be financially restored as you recover or adapt to your new life.

How Can a NY Personal Injury Lawyer Help?

No matter how you were injured, you should consider calling a New York personal injury lawyer to help you file your claim. In cases involving other people’s reckless behavior, their insurers will be reluctant to make a payout.

Insurance companies are designed to make money for shareholders. They won’t make as much when they have to pay for claims. Sometimes, an insurance company may offer you a lowball settlement in the hope you’ll accept any payment. A personal injury attorney can recognize a lowball offer and keep you from making any agreements that won’t help you.

Your attorney will also be able to help you calculate your total lost wages or potential earnings. Even if lost wages seem easy to calculate, you shouldn’t have to do that alone. Your personal injury attorney can ensure you don’t overlook any potential income, giving you a better chance of receiving compensation for your injuries.

Your attorney can help you collect the proper evidence and build your case. You’ll need pay stubs, schedules, and other documentation to prove what you could have earned if you weren’t injured. If you want to prove you lost some earning potential, you might need testimony from a medical provider or someone in your field to show that your injuries prevent you from fulfilling the same role.

Contact HKD for Help with Your Personal Injury Case

The New York personal injury lawyers at Hecht, Kleeger & Damashek, P.C., have helped clients in situations like yours recover the money they’re owed. We understand that accidents can be traumatic, and the aftermath is often confusing. Even if insurance companies offer to help you, they might not be looking out for your best interest.

We can help you get the compensation you truly deserve after you’re injured by someone else’s negligence or reckless behavior. We’ll help you evaluate your options and offer guidance throughout your case. We have a “no-win, no-fee policy”: you won’t owe us money if you don’t win your case.

Call (212) 490-5700 or use our online contact form for your initial consultation.