An accident can affect much more than your physical recovery. If your injuries prevent you from working, reduce the hours you can work or affect your ability to perform your usual job, the resulting income loss can become a significant financial concern.
A lost wages personal injury claim may address income losses connected to an injury. Depending on the circumstances, this can involve wages or salary you could not earn while recovering as well as other forms of lost earning capacity.
The legal process is not necessarily as simple as adding up the paycheques you missed. The circumstances of the accident, the nature of your injuries, your employment situation and any benefits or payments you received can all affect how an income-loss claim is assessed.
For that reason, keeping clear records from the beginning can be important.
What Income Can Be Lost After an Accident?
Lost income does not always look the same from one injured person to another.
For an employee, the most obvious loss may be regular wages or salary during time away from work. However, an injury could also affect overtime, commissions, bonuses or other employment-related income depending on the circumstances and whether the loss can be established.
Some people may return to work but be unable to perform their usual duties. You might need reduced hours, modified duties or a different position while recovering. Even if you are technically still working, your injury may have reduced your earnings.
Self-employed people can face different challenges. An injury may prevent you from completing jobs, meeting contracts or managing the business as you normally would. Establishing the financial impact may require a closer look at business records and the income you would reasonably have earned.
How Is Lost Income Established?
A claim generally needs evidence showing both the income that was lost and the connection between that loss and the accident.
Employment records can be particularly useful. Depending on the circumstances, documentation may include pay stubs, employment records, tax documents, schedules and information from your employer about missed time or reduced duties.
Medical documentation can also matter because the income loss needs to be connected to the injury. Records describing your restrictions and ability to work can help establish why you could not perform your normal duties.
For someone who is self-employed, financial records may provide a clearer picture of how the injury affected earnings. Business statements, invoices, contracts and tax information may all be relevant depending on the claim.
You do not necessarily need to know which documents will ultimately be required. Keeping records as the situation develops gives your lawyer more information to work with.
What If You Receive Other Benefits?
An injured person may receive money from sources other than their employer after an accident. Depending on the circumstances, this can include insurance benefits, sick leave or other income-continuation benefits.
These payments can affect the calculation of an income-loss claim. Ontario’s Insurance Act contains rules requiring certain payments and available benefits to be taken into account when damages for income loss or loss of earning capacity are assessed in automobile injury actions.
Motor vehicle accidents can involve another layer of rules. Ontario’s Statutory Accident Benefits Schedule provides income replacement benefits to qualifying insured people who suffer an impairment that results in a substantial inability to perform the essential tasks of their employment or self-employment.
This means an injured person should not assume that every payment received after an accident is separate from a potential claim for lost income. The interaction between different benefits can be complicated and depends on the circumstances.
What If You Can Work but Earn Less?
Returning to work does not always mean the financial impact of an injury has ended.
You may be able to return with restrictions or reduced hours. Perhaps you cannot perform overtime or have to move into duties that pay less. In other cases, an injury may affect your ability to continue in the same occupation over the longer term.
These situations can raise questions about loss of earning capacity rather than simply the wages missed during a period away from work.
The distinction matters because an injury can affect your future earning ability even after you have returned to some form of employment. Ontario law separately addresses damages for income loss and loss of earning capacity in certain automobile-related personal injury actions.
What Records Should You Keep?
Good records can make it easier to understand how an accident affected your income.
Keep copies of your pay statements and note the dates you missed work. If your employer provides modified duties or changes your hours, keep documentation showing when those changes occurred.
It can also help to keep records of:
- Vacation or sick days used because of the injury
- Commission or bonus information where relevant
- Tax documents and income records
- Business records if you are self-employed
- Medical documentation relating to your work restrictions
You should also keep a simple record of changes to your ability to work. For example, note when you returned to work, what duties you could perform and whether your hours or earnings changed.
The goal is not to create a complicated accounting system. It is to preserve information that may help establish the financial impact of the injury.
What If Your Employer Pays You While You Recover?
Being paid during your absence does not necessarily mean there is no income-related issue to consider.
You may have used sick days, vacation time or another employment benefit while recovering. You may also have received payments through an income-continuation plan.
The treatment of those payments can depend on the type of accident and the specific benefits involved. In automobile injury actions, Ontario law contains provisions addressing payments received or available through statutory accident benefits, income-continuation plans and sick leave when income-loss damages are assessed.
This is one reason it is useful to keep records even if you did not immediately lose a paycheque.
When Should You Speak With a Personal Injury Lawyer?
If an injury has caused you to miss work or has affected your ability to earn your usual income, getting legal advice can help you understand what may apply to your situation.
This can be particularly useful when your recovery is taking longer than expected, your employer has placed you on modified duties, or you are unsure how insurance benefits interact with your income loss.
A lawyer can review the circumstances of the accident and the available documentation and explain the types of losses that may be relevant. They can also help identify information that may be needed to support the claim.
You do not need to wait until you have calculated your total lost income before seeking advice. The financial impact may continue to change as your recovery and employment situation develop.
What If You Are Self-Employed?
Self-employed people can face different income challenges after an accident. There may not be a traditional employer record showing missed shifts or reduced hours.
Instead, the financial impact may appear through cancelled work, delayed projects, reduced business revenue or the cost of having someone else perform work that you normally handle.
Ontario’s accident-benefit rules specifically recognize self-employed people when determining eligibility for income replacement benefits in qualifying motor vehicle accident cases.
The evidence needed will depend on the circumstances. Business and tax records can help establish what the business was earning and how the injury affected the person’s ability to continue working.
Getting Help With an Income Loss After an Accident
Missing work after an accident can create financial pressure at the same time you are dealing with an injury and trying to recover. Understanding how income loss is documented and how different benefits may interact can help you approach the situation with better information.
If your injury has affected your ability to work or earn your usual income, consider keeping your employment, financial and medical records together. Avoid assuming that a short absence from work is too minor to discuss or that receiving another benefit automatically resolves the issue.
Nesbitt Coulter LLP can help you understand your options following a personal injury. Explore our personal injury services to learn more or contact the team to discuss your circumstances.
FAQs
What proof do I need for a lost wage claim?
Useful documentation can include pay stubs, tax records, employer correspondence, work schedules, records of sick or vacation time used and medical information relating to your ability to work. Self-employed people may also need business and financial records.
Can I claim lost income if I returned to work?
Possibly. Returning to work does not necessarily eliminate an income-related claim if you continue to earn less, work fewer hours or cannot perform the duties you previously performed.
What if I received insurance or sick-leave benefits?
Those payments may affect how an income-loss claim is calculated. In automobile injury cases, Ontario law contains rules requiring certain benefits and payments to be considered when assessing income loss and loss of earning capacity.