Lost Wages vs. Lost Earning Capacity
In a catastrophic case these two often get confused, but they are different — and for a permanent injury, the second is usually far larger.
Lost wages
Lost wages are the income you have already missed because of the injury — the paychecks lost while you could not work. They are relatively straightforward to calculate from your actual earnings and time missed.
Lost earning capacity
Lost earning capacity is the reduction in your ability to earn going forward — the career you can no longer pursue, the hours or type of work you can no longer do, over your remaining working life. For a permanent injury, this future loss can dwarf the wages already missed, and it is proven with vocational and economic experts.
The bottom line
Lost wages look backward at income already missed; lost earning capacity looks forward at a diminished future. In a catastrophic case, capturing the future earning loss — not just the wages to date — is essential to a fair recovery.
Frequently asked questions
Can I recover lost earning capacity even if I had a low-paying job?
Yes — lost earning capacity is about your ability to earn, not only your job at the time. Experts can assess the earning potential the injury took away, which may exceed your prior earnings.
This is general information about Catastrophic Injury injury claims, not legal advice. Every situation is different.
The law depends on your state
The steps above apply wherever you were hurt. Filing deadlines, fault rules, and limits on damages differ by state — pick yours for what applies to catastrophic injury.
Not sure which applies to you?
A quick, confidential review can help you decide — about two minutes, no cost, no obligation.