What is lost earning capacity?

On Behalf of | Jan 27, 2022 | Car Accidents

When people are injured in car accidents or truck accidents, they often want to seek compensation for their lost wages. This can be considered along with medical bills. For instance, if you had to spend a month in the hospital and then two more months recovering at home before you could go back to work, you may have lost thousands upon thousands of dollars in wages. Your medical expenses aren’t the only thing that will cost you. 

One related area to consider is lost earning capacity or lost potential wages, which sometimes come into play with catastrophic injuries or even wrongful death cases. What does this refer to? 

Money that would have been earned in the future 

Essentially, lost earning capacity refers to the wages that you’ve lost from future paychecks that you now will never receive. This is still a serious financial loss, and it can create a significant burden for a family. 

For instance, maybe you had a good job making $70,000 a year, and you anticipated working for 20 more years before retirement. If your injury means that you’re now only able to make $30,000 a year because you had to switch to a different job, you could argue that you’re losing $40,000 every year compared to what you should have earned. In wrongful death cases, families often calculate the entire earnings that the deceased person would have accumulated for the rest of their projected employment. 

This can be a fairly complicated process. How do you decide exactly how long someone would have worked or how much they would have earned? Do you factor in raises and promotions? There are a lot of questions to ask, and it’s important to carefully consider all of your legal options.



FindLaw Network
Nathan A. Cobb