Loss of income after an accident is calculated by comparing your actual financial situation with the probable situation without an accident. The difference between these two scenarios is legally referred to as loss of earning capacity. This complex calculation considers not only current wages but also allowances, career opportunities, pension accrual, social benefits, and remaining earning potential. A careful substantiation with evidence and a realistic future scenario are essential in this regard.
What is loss of earning capacity?
Loss of earning capacity is the financial damage that arises because you can generate less income after an accident than you probably would have done in the hypothetical situation without an accident. This damage is calculated over the period from the accident, the past, and in the case of permanent limitations over the entire future career.
Legal framework for loss of income
The legal basis for compensation lies in Article 6:95 of the Dutch Civil Code (Burgerlijk Wetboek, BW), which determines which financial damage is eligible for compensation. The court estimates the damage in the manner that is most in accordance with its nature. If the exact extent cannot be determined, the court may estimate the damage. There must be a sufficient causal connection between the liable event and the damage suffered.
The damage caused by reduced earning capacity is determined by comparing the actual income situation with the hypothetical situation without an accident.
Step-by-step plan for loss of income
To secure your claim for compensation of loss of income, it is advisable to go through the following steps.
- Medical file creation: ensure adequate medical assistance and have complaints and limitations recorded immediately and consistently by doctors.
2. Evidence collection: collect all relevant documentation about your income before and after the accident.
3. Holding liable: hold the responsible party or their insurer liable in writing for all damage suffered and yet to be suffered.
4. Damage overview: draw up a detailed overview of all missed income and extra costs, and update this periodically.
5. Preservation of time limits: monitor the limitation periods and request advances in a timely manner to prevent financial distress.
What evidence should you keep?
A comprehensive file is required for a successful claim. Think of employment contracts, pay slips, annual statements, and tax returns from recent years. Pension statements, information about bonus schemes, and collective labor agreement (CAO) increases are also important. For determining the future scenario, training data, assessment reports, and statements from the employer about any promotion opportunities can be relevant.
Limitation period and time limits
For personal injury claims, a limitation period of five years generally applies after the injured party has become aware of the damage and the liable person. Although the exact extent of future loss of income is often not yet known at the first notice of liability, the claim must be interrupted in a timely manner to preserve rights.
Overview of damage items in case of loss of income
In the calculation, direct wage loss, missed shift allowances, structural overtime, and bonuses can play a role, among other things. Career damage, missed periodic increments, promotion opportunities, study delay, lower pension accrual, and the loss of the employer’s contribution can also be important. Furthermore, income from suitable work after reintegration and tax aspects, such as a net-net comparison and a possible tax guarantee, are examined.
Determination of the compensation
The final compensation is not determined on the basis of a standard list, but by an individual comparison. Uncertainties about the future are weighed by crossing off reasonable expectations and good and bad chances against each other. In the event of admitted liability, an advance can be requested for damage already suffered. A final settlement is only applicable when the final medical condition has been reached and the career prospects are sufficiently clear.
Practical example
In practice, looking only at pay slips is often insufficient. Missed shift allowances, pension accrual, and a realistic promotion opportunity can also be included in the calculation, depending on the available substantiation. This requires cooperation with an occupational expert and an actuary if necessary.
Common pitfalls
Do not limit the comparison to the basic salary and do not forget secondary terms of employment. Do not work with an overly rosy vision of the future without objective substantiation. Carefully include benefits and remaining earning capacity.
Do not settle a case definitively before the medical resilience is stable.
