Follow-up to Collateral Income Source
An example may help bring the economist and the attorney together on how to think about collateral source income.
Think of a person who is 40 years old who works at the local petro plant and earns about $43,000 a year. The indiviudal has worked at the plant for about 17 years. On a Monday the person buys a ticket for Wednesday's lottery drawing. On Tuesday, the person is catatrophically injuried and can no longer work in any capacity. On Wendesday the person wins the lottery and will recieve $1 million a year for the next 20 years.
In this situation, it is pretty clear that the person's lost earnings capacity is the $43,000 a year. The lottery income, which was the result of an arrangement with a third party, recieved by the individual had nothing to do with the person's earnings capacity. The income was simply the result of making an investment in a lottery ticket that paid off. The individual is still out of the earnings that he would have made had he not been injuried.
Think of a person who is 40 years old who works at the local petro plant and earns about $43,000 a year. The indiviudal has worked at the plant for about 17 years. On a Monday the person buys a ticket for Wednesday's lottery drawing. On Tuesday, the person is catatrophically injuried and can no longer work in any capacity. On Wendesday the person wins the lottery and will recieve $1 million a year for the next 20 years.
In this situation, it is pretty clear that the person's lost earnings capacity is the $43,000 a year. The lottery income, which was the result of an arrangement with a third party, recieved by the individual had nothing to do with the person's earnings capacity. The income was simply the result of making an investment in a lottery ticket that paid off. The individual is still out of the earnings that he would have made had he not been injuried.
posted by The Experts @ 12:29 PM
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