Calculating Economic Loss in Compensation Claims

As part of a compensation claim, lawyers need to establish that our client has suffered economic loss as a result of their injury.

To non-lawyers, calculating economic loss (or sometimes loss of earning capacity) is far more intricate than you might realise.

Often, clients will ask us – why do you need my tax records? Or why do you need income information if I only worked somewhere for a few days?

So what types of documents might we require as evidence of loss of income or earning capacity: –

  • Tax records for at least 3 years before your injury;
  • Medical records also assist as often you will tell your doctor about matters which cause your injury to worsen (sometimes called “aggravating factors”). This could be things like lifting, pushing, pulling, bending, walking, driving.  These might be activities that you need to perform as part of your work duties;
  • Payslips;
  • Employment records – employment contracts, evidence of pay-rises; overtime, leave history;
  • Independent medical examination reports from a specialist for evidence of occupational limitations.


It is important to remember, that when we are considering these matters, we need to consider the impact of these injuries on you not just in the present, but until age 67 when you are expected to retire.  As we get older, your injury might not affect you the same way and this should be accounted for.  This is one of the main reasons we need medical evidence to substantiate the trajectory of someone’s permanent impairment.

Then, using this information, your lawyer can consider how your injury is likely to equate to loss of income or loss of earning capacity to your expected retirement.

If you need advice on a compensation claim, contact our experienced compensation lawyers via this link to discuss your enquiry on a no obligation basis.

Written by

Courtney Lockett is a solicitor admitted in the Law Court of Queensland and the High Court of Australia with years of law practice in Brisbane and Townsville. She has experience in various specialised areas of law such as property law, business and commercial law, family law, criminal law, succession law, and litigation. Click here to learn more about Courtney or follow her on Linkedin

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