Loss of Earnings Claims
If you are unable to earn your normal income due to an accident, injury, or illness that was not your fault, you may be able to make a loss of earnings compensation claim. In the UK, loss of earnings compensation is designed to provide sufficient financial support to enable individuals to continue living the lives they would have been able to live if they hadn’t been affected by an incident.
Navigating a loss of earnings claim can be challenging and complex. At The Claims Partnership, we can help you to understand when to make a claim, how much you should claim, and the likelihood of your claim being successful.
How To Calculate a Loss of Earnings Claim
For some claimants, calculating a loss of earnings claim can be relatively straightforward. If they work the same number of days and hours each month and receive the same salary, then calculating the claim should be simple. However, if they are self-employed, their hours are not fixed, or they sometimes work overtime, get bonuses, or have a salary that generally fluctuates, then making a claim can be significantly more challenging. It’s not as simple as basing a claim on the hourly rate or on estimated annual salary; there are other factors to consider.
As a general rule, when calculating your claim, you should take into account your average earnings over the previous three months. For example, if you have earned £1,600 in month 1, £1,650 in month 2, and £1,700 in month 3, then your average income over the three-month period is £1,650. Once you have calculated your average income, you simply multiply your monthly income by the number of days, weeks or months you have missed due to the incident, and then you have your recommended claim amount.
Before making your official claim, there are other factors to consider. Other factors which will be under consideration by courts include expenses you have incurred because of your injury or illness, such as medical bills and transportation costs, as well as your age, occupation and future employment prospects. Before submitting your claim, you are advised to consult with a legal professional as to whether you have covered all aspects of your claim.
Proving Loss of Income
In order for your claim to be successful, you need to have it backed up by evidence. After proving that the incident which resulted in the loss of earnings was due to someone’s negligence (usually proven via official documentation such as witness statements and reports), you will need to prove the reasoning for the amount of the compensation claimed. You will typically need to provide evidence of the following:
- Your income prior to the accident or illness
- Any additional expense you have incurred due to your injury or illness
- The time off work due to the incident
- Any additional expenditure due to the incident
Some of the official documentation you may need to provide includes:
- Pay slips
- Tax returns
- Medical records
- In some cases, you may need to provide testimony from witnesses and vocational experts
What Is Classed As Loss of Earnings
Before making your claim, it is important to consider what is meant by loss of earnings. Contrary to popular belief, loss of earnings incorporates more than just salary. There are several financial deficits which can be classed as loss of earnings:
- Your actual earnings – your wages and salary
- Overtime and bonuses that you would have received had you been able to work
- Lost benefits such as pension contributions, healthcare plans and other employment benefits
- Future loss of earnings if you are going to experience a reduced capacity to have a higher income
Lost opportunities, such as opportunities for promotions and career advancement.
Calculating Loss of Earnings For Self-Employed
As previously alluded to, making a loss of earnings claim can be problematic depending on your employment status. Being self-employed or owning your own business can produce challenges when making a claim. However, it may not be as daunting as it first seems. For the most part, if you are self-employed or own your own business, then you can calculate your claim by working out your average income over the last three months or by using your business accounts, tax returns and HMRC records.
Calculating Compensation for Loss of Future Earnings
Calculating for future loss of income can seem to be very convoluted, and you may struggle to figure out where to start. Consulting with a personal injury solicitor can help you streamline and understand the process. To calculate this, your solicitor will usually establish your net annual loss and multiply this figure by the number of years until your retirement. A wage slip can be helpful when producing this calculation.
How Much Do You Get For A Loss of Income Claim?
The compensation for loss of earnings can differ greatly based on individual circumstances. It’s essential to understand that, if you manage to resume work (whether in your previous role or a new one) after your accident or illness, the compensation you receive for lost earnings is likely to be lower. Additionally, if it’s determined that you had a role in causing your own injury or illness then your compensation could be further reduced.
As of 2024, the average annual income in the UK was approximately £34,900. Therefore, it’s a fair assumption that being unable to work for a year due to circumstances beyond your control might entitle you to a compensation amount that’s close to this figure.
Can You Claim Loss of Earnings Due to a Flight Delay
If your landing time is delayed longer than 3 hours, you may be entitled to flight delay compensation. While many of us understand our eligibility to make a flight delay claim, others are unsure as to whether you can claim loss of income due to a delayed flight.
In short, airlines are under no obligation to cover your loss of wages. However, while attempting to cover loss of earnings as part of your flight delay compensation does fall outside of the standard compensation framework, it is not impossible. Depending on the circumstances and the legal advice you receive, you may be able to encompass loss of income as part of your claim.
How To Make A Claim
If you have decided to pursue a loss of earnings claim, there are certain steps you must take. The first step is to understand your eligibility to make a claim, gather the relevant documentation (such as payslips and tax returns, etc), calculate your losses using the methods that we’ve previously laid out, consult with professionals, and then file your claim.
There are also other elements to consider when making your claim, such as the time frames. In the UK, you have three years after the incident to make a personal injury claim, so this should always be a consideration. Another factor to consider, especially when managing your expectations as to when you may receive compensation, is the potential to go to court. If a settlement can’t be agreed, then you must be prepared for court proceedings. Going to court can greatly prolong the claiming process, so when you make a claim and realise you may not be able to settle it outside of court this is another thing to consider.
Contact Us
If you would like to make a loss of income claim in the UK and would like to discuss your claiming options or how we can help you, please contact us by phone at 01772 562084, by email at info@theclaimspartnership.co.uk, or by any of the Quick Contact Forms on this page. We don’t charge. We are never in a rush, and we’re happy to help you as much as we can.