Loss of Earnings/Diminished Earning Capacity

The goal of a personal injury claim is to compensate an accident victim for their injuries. Obtaining fair compensation that addresses a person’s full range of damages requires looking at several different factors, including lost income and lost earning capacity. 

Calculating lost income in a personal injury case is a critical factor for victims who have had to miss work (in the past or future) due to an accident. Medical expenses, property damage, and other costs are important to a personal injury claim as well. However, lost income is a key component of personal injury claims, and San Antonio personal injury lawyers know how to address and pursue it. 

If you have been injured in an accident, you might have important questions about lost wages and future earnings that will need to be addressed. 

What Types of Lost Income Can Be Recovered In a Personal Injury Claim? 

What Types of Lost Income Can Be Recovered In a Personal Injury Claim?

Usually, you will be allowed reimbursement from the at-fault party or their insurance company for either: 

  • Lost income due to your inability to work caused by the accident and injuries; 
  • Lost income due to your need to undergo medical treatment for your injuries. 

You don’t need to have full-time, regular employment to be reimbursed for lost wages in Texas. Whether full-time, part-time, salary, or hourly wage, you can be compensated for missed work. The same is true if you are self-employed or run your own business. 

The most important thing you’ll need to do is document your lost earnings so they can be proven in your personal injury claim. For some, this is as simple as copying pay stubs. For others, especially self-employed workers and business owners, proving lost wages can be more complicated. 

How to Document Lost Income in a Texas Personal Injury Case 

If you have regular employment through someone else, you can ask your employer or their human resources department to provide documentation of your lost income. They can usually give you a document that shows your name, job title, pay rate, and regular hours – including hours and days missed after an accident. The document will not need to show whether you took the time as sick leave, vacation, or personal time. 

If you are self-employed or have irregular employment, proving lost income can take more work. You will need to show the amount of work time missed and what your earnings would have been if you had been able to work during those times. For example, if you work as a contractor, you can show the jobs you would or could have worked and what you would have been paid for each job. 

A business owner or self-employed worker can also show drops in billing and invoices, calendars showing canceled appointments, and other documentation of missed meetings or work opportunities. Any evidence you have available can be considered as part of a personal injury claim.

Once you’ve shown how much work you lost due to the accident, you can calculate how much money you lost based on your pay rate. If you are a regular employee, insurance companies might look at your pay stubs from the previous three months prior to the accident. This helps get a realistic idea of the income you lost while you were out. If you are self-employed, they might also look at your revenue generated throughout the year and what you’d typically expect during the time you missed. 

If your work is seasonal or sporadic, your yearly earnings could be reviewed. Then, you would divide that yearly average based on the days, weeks, or months you lost. The best evidence for this purpose could be your annual tax return for the year or for past years. These documents can show your earning patterns and work history. Be careful about submitting tax information to insurance adjusters, however, as these documents can contain sensitive personal information. 

What Is Diminished Earning Capacity in a Personal Injury Case? 

Diminished earning capacity is different from lost wages. If your injury negatively affects your ability to earn income in the future, you might be entitled to compensation for diminished earning capacity in Texas. Texas law requires a showing that you suffered a physical injury that will create a net loss in your future earnings. 

For example, if you are a hairstylist, injuries to your hands, arms, or legs will reduce your ability to work in that field as you did before. When you can prove this through a number value, you could collect compensation for diminished earning capacity. Lost earning capacity can include not only future losses but current and past losses as well. 

How to Prove Diminished Earning Capacity 

To prove diminished earning capacity, you will need to show what your occupation is, what your typical earnings are or should be, and how the injury reduces your ability to earn. This can be proven through tax returns, business records, occupational experts, or even testimony from work clients. It is critical to seek compensation for future losses at the time your personal injury claim is filed, and a personal injury lawyer can help you address all lost income – past, present, and future. 

A San Antonio Personal Injury Lawyer Can Help With a Loss of Earnings/Diminished Earning Capacity Claim

If you or a loved one has been injured in an accident, you may be entitled to economic damages, including reimbursement for lost earnings. You can also be entitled to payment for lost future income if you provide the right documentation. A San Antonio personal injury lawyer can help you address these and other questions you might have. Call our office today at (210) 225-0909 for a free consultation with a San Antonio personal injury lawyer. Let us get to work on your case to speed up the personal injury timeline if possible.