How is Future Loss of Income Calculated?

How is Future Loss of Income Calculated?

June 22, 2022

Ellis Law Corporation


If you or a loved one was injured due to someone else’s negligence and you wish to file a personal injury claim, you might be wondering how your loss of income will be calculated. If the case goes to trial, what happens to future lost income once the trial is over? It’s important for your lawyer to help calculate what the expected future loss of income will be so that it can be included in negotiations or during the trial. If you have questions or need help, don’t hesitate to contact us for a free consultation.

Factors to Consider When Calculating Future Loss of Income

To determine how much you or your family should be compensated for future loss of income, the courts will typically consider the following factors:

  • The victim’s age
  • The victim’s occupation
  • The victim’s educational level
  • The victim’s health
  • The severity of the injury
  • The victim’s ability to continue with their current job or other similar employment
  • The wages earned by the victim since the injury
  • The victim’s potential to compete in the labor market

Additionally, the following information is used to help determine future loss of income:

Analysis of Past Earnings

One of the major considerations will be how much you or your loved one earned before the injury occurred. This should include wages, overtime, bonuses, benefits, and other commissions. It is easy to evaluate past earnings when the victim has worked at the same workplace for many years and is a salaried employee.

This calculation can become more difficult when the victim isn’t salaried or paid hourly, such as someone who is paid through commission. Additionally, if the victim’s hours aren’t consistent, it can make this calculation more difficult.

Overall, past earnings are used as a strong indicator for future earning patterns. They are often adjusted as needed using economic factors and the influence of seasonal changes. Other factors used in this analysis are the victim’s level of education, promotion history and expected promotions in the future, and the salary of people in a similar career track.

Evaluation of Non-Monetary Work Benefits

This is also referred to as benefit analysis and is part of the standard evaluations when calculating lost future wages. Work benefits include medical and dental insurance, corporate residences, vehicles, and retirement programs, among others.

Analysis of Pension and Retirement Plans

When calculating the future earnings lost due to injuries the victim suffered in an accident, it is important to factor in the pension and retirement options that have been lost. If the victim cannot work for a long period of time and isn’t getting paid, they’re also losing out on money that their company would have matched based on the victim’s contribution to their retirement account.

Pensions are usually understood to be an amount of money an employer will pay to the employee once they decide to retire. It usually depends on how much money they make, how valuable they are to the company, and how long they have worked for the company. If the injured party is no longer entitle to the pension because they aren’t able to work, this is something that must be calculated for future loss of income.

Some of the calculations can be a bit complicated, but a Los Angeles personal injury lawyer can help you determine what you are entitled to. If you have questions or need help, contact us today for a free consultation.