Lost Income Damages for Stay-at-Home Spouses

Just because you do not work outside the home does not mean you cannot claim personal injury damages for lost earning capacity or even lost wages.  When calculating lost income damages for stay at home parents or spouses, you will need to come up with value for two things: income earning potential, and economic value of household services.  In both cases, you will need to estimate the impact your injury has on damages that don’t have easily identifiable costs – a difficult task without the assistance of an experienced attorney.

Valuing Lost Income for Non-Working Spouses

As you develop estimates for the value of your lost earning potential and inability to perform your normal household services, you will need to provide evidence that indicates what you could earn if you decided to return to work and what you will need to pay to replace the duties you used to perform.

In order to show your lost earning potential, you will need to use whatever education or training you have and compare it to what someone else of similar accreditation earns in the workforce.  If you used to work before deciding to stay at home, you can use your past earning potential and adjust it up to take cost of living raises or promotions into account.  If your injury is long-term or permanent, and you are forced to take a job well below your education or experience, then you may be able to include the difference in pay between what you could have earned without the injury and what you actually earn in the job your physical disability limited you to.

When calculating economic value to the household services you supply to your family every day, make a list of all the duties you perform including:

• Childcare,
• Grocery shopping,
• Cooking,
• Cleaning,
• Paying bills, and
• General household management.

After identifying all the services you provided the household, you can arrive at a damages value by showing how much it would cost you to hire someone to do that work since you are unable to.  Put a value on your need to hire a nanny or a maid, bring your children to daycare, or force your other spouse to cut down his or her work hours to pick up the slack.

Example of Calculating Stay-at-Home Lost Income Damages

Suppose you have a degree in elementary education. You were a teacher for 5 years prior to deciding to stay at home. Your pre-injury earnings average out to $30,000 a year. Your earning capacity, however, is not just limited to what you did before you were injured, but what you are capable of doing later with your education, experience and background. So all of these factors are taken into account and put together, usually by an economist in the case of a long-term disabling injury. Because you were only “disabled” for 3 weeks, your attorney may choose to handle it him or herself perhaps basing it on other similar cases he or she has had. Maybe those three weeks would have a value of about $4,000 with your background for lost earning capacity. Then, let’s assume you would have to pay someone to do the cooking, ironing, shopping, cleaning, gardening, etc. while you are in bed. That might amount to about $1,500 for the 3 weeks. Your losses could be as much as $5,500 for the 3 weeks given your earning capacity. An experienced attorney should be able to make this argument for you.

Much of this is speculative based on what you and your attorney are able to prove convincingly to a jury. This example is based on fictitious figures and facts, so your individual case may vary from this substantially. For information on how to value your specific claim for lost earning capacity, contact an attorney who is familiar with these types of cases and ask how he would go about proving your losses.

Case Studies: Lost Income Damages for Stay-at-Home Spouses

Case Study 1: Sarah’s Lost Earning Potential and Household Services

Sarah is a stay-at-home spouse with a degree in accounting. Due to a long-term disability, Sarah could no longer work or fulfill her household responsibilities.

Her attorney estimated her lost earning capacity to be around $2 million based on her education, experience, and potential career growth. The economic value of her household services, such as cleaning and cooking, was calculated at approximately $40,000 per year.

Case Study 2: David’s Limited Earning Capacity

David is a stay-at-home spouse with construction experience, suffered a severe back injury. His attorney argued that his limited earning capacity due to the injury significantly impacted his potential income.

A vocational evaluator determined that his maximum earning capacity in a sedentary occupation would be $30,000 per year, resulting in a difference of $20,000 per year from his potential earnings in construction.

Case Study 3: Amanda’s Replacement Costs for Household Services

Amanda, who sustained a traumatic brain injury in a car accident. The injury affected her cognitive abilities and hindered her ability to manage household tasks. Replacement costs for her household services were estimated by professionals, resulting in an annual cost of approximately $9,000.