A serious personal injury can often render an individual incapable of working, sometimes for the remainder of their life. Severe car accidents in Massachusetts are often the cause of life-threatening injuries that can cause severe disabilities. How does one calculate the future loss of income when unable to work?
How to estimate lost earnings
Several factors go into a lost earnings calculation in a personal injury lawsuit. To determine lost earnings, one starts with a base salary, an annual growth rate and any benefits the person may receive. Household services that the person may no longer be able to perform may also be computed into a lost earnings calculation. Earnings are projected until the injured person would have supposedly retired.
Other ways of determining an individual’s projected income if the current salary is unavailable include using the information on current market rates for a job category matching the person’s background and training. Benefit costs include Social Security taxes, paid holidays and vacations, health benefits and 401(k) contributions and projections for those. The value of household tasks requires inclusion because if someone is disabled badly enough, another person may need to perform those tasks.
Why injury victims need loss of income compensation
Whenever someone incurs a serious injury, no matter the circumstances, they need money to pay their bills so that they can live a comfortable life. While victims can press suit for damages related to the accident to pay their medical bills, that is only part of the story.
Planning for loss of income ensures that an injured person won’t be left destitute. This award is generally part of a total compensation package given to injury victims.