How Loss of Income is Determined in an Injury Claim
After an accident or injury, you may be forced to take time off from work. If you were in a car accident, you may recover various types of accident benefits, including Income Replacement Benefits. If you are filing a lawsuit against a negligent party – whether for a motor vehicle accident or other accident – compensation for loss of income is calculated by considering past earnings together with projections of future earnings.
Calculating Past Income Loss
If you are involved in a motor vehicle accident and have to take time off work after an injury, you can recover money for the days that you missed. However, you will not receive any compensation for the first 7 days following an accident. This does not apply for other injury claims. In those claims, like slip and falls claims, you are entitled to all lost income from the date of the accident onwards.
In motor vehicle accident claims, accident benefits coverage will provide you with Income Replacement Benefits up to a maximum of $400 per week, however, those benefits are not payable for the first seven days immediately following the accident. The difference between the $400 per week and what you would ordinarily earn can be sought from the at fault party. However, unfortunately, under the current legislative framework, you can only receive a total of 70 percent of your gross income prior to the collision until the trial date if suing the at-fault party. The at fault party will also get credit for all income or Income Replacement Benefits paid by the accident benefit carrier or from any other source which provides income continuation like CPP or short or long term disability insurance.
To calculate how much money you should receive for past income loss, a court will look at:
- your past paycheck stubs;
- tax returns;
- bank account statements; or
- other documents that prove what you were previously earning.
Payments for Future Income Loss
Accident victims may be entitled to file a lawsuit against a negligent driver responsible for the collision in addition to collecting no-fault accident benefits. While they may recover 70 percent of gross earnings until the trial date, they may recover 100 percent of gross income loss and earning capacity after the trial.
A completely disabled person who is 20 will receive more compensation for lost future income than a person who is 60, because the 20-year-old has more working years left, while the 60-year-old is approaching retirement. To calculate your future income, an expert may analyze factors like your career trajectory and predictable raises, or your ability to change jobs or begin a new profession.
Deduction of Other Benefits
In general, the amount you receive in either past or future income loss damages relating to motor vehicle accidents will be reduced by income you receive from other sources.
The person or entity responsible for paying your damages is usually entitled to deduct any other benefit amounts from the amount of your lost future or past income like:
- Short and Long Term Disability payments;
- Canadian Pension Plan; or
- Income Replacement Benefits.
For slip and fall claims, the at-fault party may receive credit for income received from other sources but only under certain circumstances. A lawyer can help determine those circumstances.
Dealing with Disputes Regarding Loss of Income
While damages for past income loss are relatively straightforward to calculate, determining the correct amount of future income loss tends to be a major source of conflict between an accident victim and the person paying the damages. Often, experts are required to analyze your potential for future income, especially in the case of younger individuals who are disabled and stand to lose a lifetime of working.
If you have been seriously injured in an accident, talk to a personal injury lawyer to fight for your rights so you recover fair compensation for your loss of income. Preszler Injury Lawyers works for accident victims like you, and may be able to advise you of what to expect in a free initial consultation in one of their six Ontario offices. Call 800-JUSTICE® or fill out our online case evaluation form.