1. What is Loss of Earning Capacity?

Definition: This calculator estimates the financial impact of reduced earning capacity due to injury, disability, or other factors.

Purpose: It helps individuals, legal professionals, and insurance companies quantify potential economic losses.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( LEC \) — Loss of Earning Capacity (USD)
• \( E \) — Expected earnings without impairment (USD)
• \( k \) — Capacity factor (0 to 1, where 1 = full capacity, 0 = no capacity)

Explanation: The expected earnings are multiplied by the reduction in earning capacity (1 - k) to determine the financial loss.

3. Importance of LEC Calculation

Details: Accurate LEC calculation is crucial for fair compensation in legal cases, insurance claims, and financial planning for individuals with disabilities.

4. Using the Calculator

Tips: Enter the expected earnings (annual or lifetime) and capacity factor (default 0.5). Capacity factor must be between 0 and 1.

5. Frequently Asked Questions (FAQ)

Q1: What is the capacity factor?
A: It represents the remaining earning capacity (0 = no earning capacity, 1 = full capacity).

Q2: How do I determine the capacity factor?
A: It's typically determined by medical professionals or vocational experts assessing work capability.

Q3: Should I use annual or lifetime earnings?
A: Both approaches are valid. For legal cases, lifetime earnings are often used with appropriate discounting.

Q4: What if my earning capacity fluctuates?
A: Use an average capacity factor or calculate for different scenarios (best/worst case).

Q5: Does this account for future earnings growth?
A: No, for precise calculations, consider projected earnings growth separately.