New York’s personal injury law firmClick For Your Free Consulation
NYC Personal Injury Lawyer » New York Personal Injury Blog » What Is the Difference Between Loss of Income and Loss of Earning Potential?
Posted in Personal Injury on January 3, 2023
When you suffer a personal injury due to someone else’s negligence, New York personal injury laws allow you to seek monetary compensation for your damages. Damages include the pain and suffering you experience and other non-economic damages. They also include your financial or economic damages.
A large portion of economic damages is the cost of treating injuries. However, many victims also incur a substantial loss of income and earning potential. If you could not work because of an injury that was not your fault, you might be entitled to reimbursement for lost wages.
A New York personal injury lawyer can help you document your loss of income and earning potential to maximize the amount you receive for your injury claim. The first step is gathering evidence proving a loss of income due to your injury.
Loss of income is a type of economic damages. You sustain a loss of income when your injuries prevent you from working after an accident or personal injury. The loss might be temporary or permanent, and total loss of income or partial loss of income.
Examples of loss of income can include, but are not limited to:
It can also include the loss of benefits and perks, such as sick time, vacation time, bonuses, commissions, and retirement fund contributions. A loss of income claim includes actual lost wages through the settlement date. It can also include future lost wages if you sustain a permanent disability that prevents you from working in the future.
Sometimes, a person sustains a permanent injury that impacts their ability to work. But the injury does not prevent them from performing all types of work.
However, the injury does prevent the person from earning as much money as they would have earned had they not been injured. Therefore, the claim is for a loss of earning potential.
You can receive compensation for the difference between what you would have earned and what you could earn. However, proving a loss of earning potential claim can be more challenging than proving a loss of income claim.
Proving a loss of income is more straightforward than a loss of earning potential. First, you must have medical evidence proving that you could not work. A doctor or medical specialist must explain how your injury prevents you from performing any type of work.
Then, you must show how much you would have earned had you been able to work. Evidence used to prove loss of income can include copies of tax returns, W2s, 1099s, income statements, and statements from your employer. An economist would need to help establish future lost wages based on various factors, including age, occupation, life expectancy, and projections for future economic conditions.
Proving a loss of earning potential involves obtaining evidence from medical specialists explaining the extent of your injury. Then, the doctors must testify how your injuries impact your ability to work. For example, your back injury prevents you from returning to your old job, but you could perform work that would earn roughly one-half of the money you earned before the injury.
Economists and other financial professionals must determine how much you would have earned had you not been injured. They base the amount on many factors, including your ability to continue in good health on the same career path.
Expert witnesses also predict how much you can earn in the future, given your current impairments. The difference is the value of your claim for loss of earning potential.
The factors used to calculate a loss of income claim and a loss of earning potential claim are unique to each case. However, factors the experts use include, but are not limited to:
Insurance companies and defense attorneys often downplay insurance claims for loss of earning potential claims. Instead, they argue that the victim exaggerates their injuries to get more money. A New York personal injury lawyer can help you obtain expert witness testimony to prove that you are entitled to full compensation for your losses.
If you need legal assistance, contact the New York City personal injury lawyers at Law Offices of Jay S. Knispel Personal Injury Lawyers at your nearest location to schedule a free consultation.
We have two convenient locations in New York:
Law Offices of Jay S. Knispel Personal Injury Lawyers – New York City Office
450 7th Ave #1605
New York, NY 10123
Law Offices of Jay S. Knispel Personal Injury Lawyers – Brooklyn Office
26 Court St Suite 2511
Brooklyn, NY 11242