07 March 2022

If you’ve been involved in any type of accident and have suffered injuries that prohibit you from resuming your normal work activities, you may have the ability to claim compensation. This compensation will provide you with income to be able to meet your financial obligations.

It’s commonly referred to as compensation for past and future economic loss and generally, forms part of a personal injury or worker’s compensation claim.

Bear in mind that your injuries may stop you from resuming the type of work that you’ve done in the past and you might be forced to take other work that does not allow you to earn the type of income that you’re used to.

Therefore, this type of compensation doesn’t only provide you with the recompense of income you’ve lost in the past but also covers income that you might have been able to obtain in the future, had you not been injured in the first place.

Past Income Losses

In common law matters, compensation for past income can be easily determined as it’s based on the income that you haven’t been able to earn from the date that you were injured to the date that your case gets settled.

So, it’s just a case of adding up the net weekly earnings that an injured party would have been entitled to if he or she was able to work. It’s also possible to claim for lost superannuation contributions for the period of time that the injured person was unable to work.

It’s also interesting to note that if an injured party was not gainfully employed at the time of the accident but the injuries prevented him or her from entering such employment, there may be the option to claim for compensation.

Future Income Losses

Generally, future income losses can be a little more complex to determine and are reliant on certain factors that need to be proven.

These include:

  • The injured party has to establish that he or she is unable to return to the normal employment that they were engaged in prior to the injury.
  • If the injured party is able to return to work but is unable to perform their normal duties and this results in loss of income, then a series of calculations have to be performed to determine the extent of the lost income.

Loss of Earning Capacity

This reduction in future income is often referred to as loss of earning capacity. In this case, the court may award a global sum. This global sum also takes into account whether you will now have to retire earlier than you had anticipated and/or that you may now not be capable of achieving the career advancement that you had planned before the accident.

In addition, there also needs to be a sum added that reflects the loss in superannuation contributions that would have been made if you, the injured party, had not been injured in the first place.

In a nutshell, compensation for past and future income loss covers both the income that you have lost and the possible income that you may lose after you’ve sustained an injury from an accident.




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