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Loss of Earnings/Diminished Earning Capacity

When you are injured due to someone else’s actions, one of the most significant impacts on your life is the loss of income or the ability to earn the same amount of money as you did before the injury. This can be a major financial burden, and the legal system allows for compensation in these cases. Whether it’s from an accident at work, a car crash, or any other personal injury, the impact on your ability to make a living can be long-lasting. In this article, we’ll explain what “Loss of Earnings” and “Diminished Earning Capacity” mean, and how these concepts play a role in your injury case.

What Is Loss of Earnings?

Loss of earnings refers to the income you lose because of the injury you sustained. If you cannot work at all or if you are unable to perform the same duties at your job, you may experience a decrease in wages. 

This type of financial loss can include:

  • Past lost wages: The money you missed out on while recovering from the injury.
  • Future lost wages: The money you will lose in the future if you cannot go back to your job or can only return at a reduced capacity.

For example, if you are out of work for several months after an accident, the wages you would have earned during that time are considered “lost earnings.” In a legal case, you can often recover these wages if it can be proven that the injury directly caused your inability to work.

What Is Diminished Earning Capacity?

Diminished earning capacity is slightly different from loss of earnings. While loss of earnings covers the immediate income lost after an accident, diminished earning capacity refers to the future income you are likely to lose because the injury permanently affects your ability to work. In other words, it’s about how much your future ability to earn has been reduced because of the injury.

For example, if your injury has caused permanent disability or long-term pain, you might no longer be able to work in the same job or at the same capacity. A job that requires physical labor may become impossible if you are left with chronic pain or limited mobility. Even though you may not have lost all your income immediately, the injury could limit your career prospects, which means you could be earning less in the future.

How Are Loss of Earnings and Diminished Earning Capacity Proven?

In order to seek compensation for loss of earnings or diminished earning capacity, you need to prove the financial impact of your injury. 

Your personal injury attorney will help gather the necessary evidence, which might include:

  • Medical records and expert testimony: These documents and expert opinions help show how your injury limits your ability to work.
  • Employment records: Pay stubs, tax returns, and other records showing your income before and after the injury.
  • Vocational experts: These experts can testify to how your injury impacts your ability to do your job or work in the future.

Your attorney will work with experts to estimate how much money you’ve lost, both now and in the future, because of your injury. If you’ve been unable to return to your job or have had to take a lower-paying position, they will help demonstrate how this affects your earnings.

Types of Injuries That Can Lead to Loss of Earnings or Diminished Earning Capacity

There are many different types of injuries that can lead to loss of earnings or diminished earning capacity. 

Some of the most common injuries include:

  • Traumatic brain injuries (TBI): These can cause cognitive or physical impairments that make it difficult or impossible to return to work.
  • Spinal cord injuries: These injuries can cause paralysis or long-term physical limitations, reducing your ability to work in certain jobs.
  • Chronic pain: Injuries that cause ongoing pain, such as back injuries or joint injuries, can make it difficult to continue working.
  • Amputations: If you lose a limb, you may no longer be able to perform the same type of work you did before.

These types of injuries can have a major impact on your ability to work and earn a living, and they often lead to a diminished earning capacity.

Compensation for Loss of Earnings and Diminished Earning Capacity

If you’ve suffered a personal injury and can prove loss of earnings or diminished earning capacity, you may be entitled to compensation for both past and future income losses. 

Damages can include:

  • Reimbursement for lost wages: You may be compensated for the wages you lost while recovering from the injury.
  • Compensation for future income losses: If your injury will impact your ability to earn money in the future, you may be compensated for the income you would have earned had the injury not occurred.

The goal of compensation is to make you whole again, as much as possible, by addressing the financial loss caused by the injury.

How Much Compensation Can You Expect?

The amount of compensation you may receive for loss of earnings or diminished earning capacity depends on several factors, including the severity of your injury, your ability to return to work, and the impact the injury has on your future earning potential. In some cases, the compensation could be substantial, especially if the injury is permanent or has caused a significant reduction in your earning ability.

Contact Our Personal Injury Attorneys for a Free Consultation

If you’ve been injured and are experiencing a loss of earnings or diminished earning capacity, it’s important to speak with an experienced attorney. At Parker Law Firm Injury Lawyers, we offer free consultations to evaluate your case and help you understand your rights. Let us guide you through the process and fight for the compensation you deserve. Contact us today at (817) 839-3143 to schedule your free consultation.

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