Salary Compensation: How To Calculate Lost Pay As Part Of Your Personal Injury Claim
Discover what salary compensation is; the three parts of compensation for salary loss you can claim (past lost pay, future lost income and disadvantage if you are in work should you lose your job at a later time); find links to our articles which allow you to calculate the pain and suffering for your injuries with access to our specialist solicitor free online legal help with your wage loss claim.
What is salary compensation following personal injury?
If you have been involved in an accident and suffer injury, which prevents you from being able to go to work either as an employee or as a self-employed worker – you will be entitled to make a salary compensation claim for your lost pay.
Watch out – you may still be able to go to work, but may not be able to work as long hours or have reduced overtime.
In addition to compensation for lost salary – you are entitled to claim for other financial losses and receive money for pain and suffering from the injury itself.
See our compensation calculator UK article – setting how to calculate the average settlement amounts for various different physical and psychological injuries following an accident.
What types of salary compensation are you entitled to claim?
There are three primary types of salary compensation you can claim following an accident in the UK:
Past loss of pay up to the date of settlement of your personal injury claim
Past salary compensation is the lost pay up to the date your claim settles.
Imagine that you work as a builder and you had an accident 9 months ago resulting in you being unable to work. Your compensation claim is reaching settlement, so your solicitor will calculate your past lost pay from the date of your absence from work to the date of the settlement of your claim.
If you are an employee – your average weekly pay prior to the accident can be calculated by using 13 weeks of pay slips (the self-employed need annual accounts). The exact amount of time up to the date of your settlement is calculated by your solicitor, say 42.5 weeks, and the number of weeks absence is simply multiplied by your average weekly net pay prior to the accident – giving your past salary compensation loss.
So a weekly net loss of £200, with a 42.5 week absence would give rise to a past salary compensation claim of £8,500.
Future salary compensation loss
As part of your claim – your solicitor will have obtained an expert medical report, which will set out your symptoms and the reasonableness of any absence from work. In the report a prognosis will be provided describing how your injury will affect you into the future and how long it is reasonable, given your injuries, that you should continue to remain absent from work.
Future lost income is calculated as a continuing loss from the date that your settlement is reached. It is paid on settlement of your claim as a lump sum.
if the medical expert predicted a further 2 months absence from work following settlement – you should receive the two month’s lost income, but if a much longer period such 8 years was predicted you would not get the full 8 years lost salary.
In such instances – the ability to retrain and do another job should be considered. The cost of training and the difference in salary between the two jobs could be claimed – if the new job was less well paid.
If your injury disabled you from being able to do any other job – future compensation for salary is a complicated calculation that takes into account the likelihood of promotion with pay rises in your career choice. Other considerations include; Inflation increases, and loss in pension contributions.
For example – imagine you are a teacher who could have been promoted to a deputy head or head teacher over a number of years with a resultant pay rise.
Watch out – a deduction would then be made for early payment of a lump sum (known as the discount rate). Receiving a lump sum effectively means you are paid many years before you could have earned the money and you may have the advantage of investing that money and making returns you may not have been able to do had you not received an early payment.
Disadvantage on the open labour market
Imagine at the time your claim settles you have returned to work, but you are still suffering symptoms of your injury or a disability.
As you are working you have no future salary compensation loss, but what happens if in the future you lose your job and have to look for another job?
Someone who is slightly disabled will have a disadvantage in finding a new job compared to worker who has no disability.
Your solicitor could argue that you have a “disadvantage on the open labour market”.
In other words – there is a risk that you may lose your job and it is therefore likely you will take longer to find alternative work and any work found might not be paid so well due to the ongoing effect of your symptoms.
There are no fixed values for a disadvantage – it does relate to your annual salary and the risks of your career in finding a work.
For example – a manual labourer with an arm injury could have more disadvantage than a solicitor with the same injury as the job of a solicitor will not be so hampered as that of a labourer by physical injury.
No two cases are alike and your lawyer would have to argue disadvantage on your behalf.
Salary Compensation Summary
In this article we have described the lost wages you can claim (whether employed or self-employed) for past income loss, future pay loss (even after your claim settles) coupled with compensation for potential income loss should you lose your current paid employment.
Free Online And Telephone Legal Help
If you have suffered a past loss of salary, have a future salary compensation claim or wish to discuss disadvantage on the open labour market – see our salary specialist solicitor free online / telephone help options.
You can ask a question, receive an online claims assessment or arrange a solicitor callback to discuss your salary compensation claim in more detail.
