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Future Earnings

If you’ve suffered a personal injury, your earning capacity may have been affected. This can cause serious financial and emotional stress, especially if you are the breadwinner or have dependents to support. Being compensated for loss of earnings is a crucial aspect of a legal claim for personal injury.

But it’s not just past and present earnings that need to be taken into account. Future earnings also need to be considered as they will have a significant impact on your quality of life.

public liability claims and future earnings

Compensation for loss of future earnings

If your injury has affected your earning capacity, you may be able to claim injury compensation for:

  • Loss of past earnings; and
  • Loss of future earnings (also known as “loss of earning capacity”).

To be entitled to a claim for loss of future earnings, you must prove that the loss was caused directly by your injuries. This means that you will have to show proof (usually financial documents) of your loss. Financial documents can include:

  • Tax returns for three years prior to the date of injury.
  • Documents proving employment and income (for example, employment contract, letter of termination and pay slips).
  • Proof of any leave that you had to take following the accident.

Medical reports will also be essential in working out your level of future working incapacity.

Reductions

If loss of future earnings is part of your personal injury claim, you need to be aware that a court may reduce your claim in a number of ways. For example, loss of future earnings is typically paid as a lump sum. It then may consider factors such as your net wage prior to the accident and your current age to work out whether to reduce your claim.

If you were injured in a motor vehicle accident after 1 July 2013, the new Compulsory Third Party (CTP) insurance scheme applies. You must show that your injury has been assessed as exceeding a certain level on the scale.  Then, any damages awarded for any form of loss or impairment of earning capacity must be discounted by a rate of 20 percent.

The effect of this new scheme has meant that many people whose earning capacities are affected by their serious injuries are unable to claim damages for loss of future earnings. This is so even when the injuries prevent them from returning to their pre-accident employment.

Calculating loss of future earnings is a complicated task and there are many issues to take into account. It’s essential to get help from an experienced injury lawyer to ensure that you get everything to which you’re entitled.

Websters Lawyers has an outstanding team of personal injury and public liability lawyers who can assist you. Contact us today for a free initial consultation.

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