Wage Loss Benefits

Michigan No-Fault Insurance Wage Loss Benefits

The second type of no-fault insurance benefit that can be recovered is the wage loss benefit, which unlike allowable medical expenses, is capped in amount and duration. The governing statute for wage loss benefits is M.C.L. 500.3107(1)(b), which states that personal protection insurance benefits are payable for:

Work loss consisting of loss of income from work an injured person would have performed during the first 3 years after the date of the accident if he or she had not been injured. Work loss does not include any loss after the date on which the injured person dies. Because the benefits received from personal protection insurance for loss of income are not taxable income, the benefits payable for such loss of income shall be reduced 15% unless the claimant presents to the insurer in support of his or her claim reasonable proof of a lower value of the income tax advantage in his or her case, in which case the lower value shall apply. Beginning March 30, 1973, the benefits payable for work loss sustained in a single 30-day period and the income earned by an injured person for work during the same period together shall not exceed $1,000.00, which maximum shall apply pro rata to any lesser period of work loss. Beginning October 1, 1974, the maximum shall be adjusted annually to reflect changes in the cost of living under rules prescribed by the commissioner but any change in the maximum shall apply only to benefits arising out of accidents occurring subsequent to the date of change in the maximum.

In sum, you can recover wage loss benefits for a 3-year period at the rate of 85% of your gross pay that you would’ve earned from working that you would’ve been able to perform had the accident never occurred. The maximum monthly wage loss benefit is adjusted each October. As of October 1, 2006, the monthly cap is set at $4,589. This will apply to accidents occuring after this date and before the date of the next adjustment. Contact an expert Michigan car accident attorney to stay current on the monthly wage loss benefits cap.

“Would Have Performed”

What does “would have performed” mean? This is one of the most critical issues with regard to payment of wage loss benefits. Many cases have addressed this issue, and you should consult with an expert Michigan car accident attorney to know if, but for the accident, you would have performed.

Loss of Earning Capacity

Note that work loss benefits are only paid for an actual loss of income. According to a number of Michigan cases, it does not cover the loss of earning capacity. Please speak with an expert Michigan car accident attorney if you have questions regarding loss of earning capacity.

Subsequent Superceding Disability or Event

This is an important point to understand about work loss benefits. Michigan courts have place a major limitation on the right to recover wage loss benefits when a subsequent superceding event takes place. In other words, even if you would have performed your employment had this subsequent superceding event not taken place, if it does take place, then your right to collect work loss benefits is cut off.

For example, the Michigan Supreme Court ruled that a claimant could not continue receiving work loss benefits after suffering an unrelated heart attack a few weeks after being disabled during a car accident. There have been many cases addressing subsequent superceding events. As such, it is important to speak with an expert Michigan car accident attorney to understand your rights to collect work loss benefits if a subsequent superceding event occurs.

Duty to Mitigate

There is a duty to mitigate, or in other words, make an effort to return to work. The Michigan courts have ruled that at a certain point, an injured worker must make reasonable attempts to return to some form of employment. Seeing how this is an area of law that is not fully developed yet, it’s best to get the advice of an expert Michigan car accident attorney.

Lost Fringe Benefits

Do work loss benefits include the value of lost fringe benefits that an injured worker loses as a result of a car accident related injury? The Michigan Supreme Court said no, stating that work loss benefits do not include the value of lost fringe benefits, such as the value of lost health insurance benefits, employer contributions to pension plans and lost employer-paid social security taxes. Rather, work loss benefits are limited to the loss of income from work the injured worker would have performed if the accident had not occurred. Speak to an expert Michigan car accident attorney to discuss lost fringe benefits.

Wage Continuation

An issue that often arises with regard to work loss benefits is whether one can still collect work loss benefits if an employer continues to pay the injured worker either gratuitously or under some type of wage continuation plan. It appears that based on a 2005 Michigan Supreme Court court ruling, that wage continuation will offset any no-fault wage loss benefits. However, this is an issue that you should discuss with an expert Michigan car accident lawyer to confirm.

Self-Employed Claimants

Wage loss claims for self-employed individuals who suffer an injury as a result of a car accident are difficult to process because it’s generally difficult to establish what a self-employed individual would have earned. Income in many self-employed situations can be very erratic. The Michigan Court have not laid out a clear test on calculating wage loss benefits for self-employed claimants. Therefore, it’s important to speak with an expert Michigan car accident attorney if you are a self-employed claimant seeking wage loss benefits.

Part-Time Employees

Part-time employees are also entitled to work loss benefits under Section 3107(1)(b) of the No-Fault Insurance Act. In the case of a part-time employee, the calculation will simply be what the person would have earned in part-time employment had he or she not been involved in the car accident.

Temporarily Unemployed

Section 3107a extends wage loss benefits to individuals who are considered “temporarily unemployed.” The statutory language states:

Subject to the provisions of section 3107(1)(b), work loss for an injured person who is temporarily unemployed at the time of the accident or during the period of disability shall be based on earned income for the last month employed full time preceding the accident.

Much of the law on extending wage loss benefits to those who are temporarily unemployed has been developed by the Michigan courts. It’s best to speak with an expert Michigan car accident attorney to find out if you qualify as as being “temporarily unemployed” for wage loss benefits.

If you or someone you know was recently injuried in a car accident and you would like to know your rights and what you are entitled to collect, please set up a free case review with one of the leading expert car accident law firms in Michigan.