Making a loss of earning capacity claim
The accident has changed what kind of work you can do, or whether you can work at all.
Loss of earning capacity is about the future, not the past. It covers a reduced ability to earn a living because of your injury, separate from income already lost before trial. It is one of the more complex heads of loss in a road accident claim, and this page explains it plainly.
What loss of earning capacity means
This head of loss recognises that an injury can permanently reduce what you are able to earn, even if you are working now. It can narrow the range of jobs open to you, or make you more vulnerable if you ever lose your current one. It is distinct from loss of earnings, which covers the period up to trial.
How it affects daily life and work
A physically demanding job may no longer be realistic. A driving-dependent role may be closed off by a vision or mobility injury. Simply competing for a new job can become harder with a visible or documented impairment. These effects are often more about future risk than a pay cut you can point to today.
The evidence and medical report you need
You need proof of what you were earning before the accident, such as payslips, EPF (Employees Provident Fund) statements or business records for the self-employed. Alongside this you need a specialist report connecting your injury to a realistic reduction in future earning ability. This evidence feeds into the medical report for your claim and needs to be specific to your occupation.
How it factors into your claim
The law generally allows a claim for loss of future earning capacity up to age 60, reflecting the years of working life the injury has affected[1]. This sits alongside pain, suffering and loss of amenities. Those are assessed against the Revised Compendium of Personal Injury Awards and your medical evidence, under section 28A of the Civil Law Act 1956[2]. How compensation is worked out explains how all the heads of loss relate to each other.
Recovery and prognosis, realistically
Some people adapt fully and return to their previous earning level. In that case this head of loss may not apply. Others face a genuine, lasting reduction that the medical and vocational evidence should describe honestly. There is no assumption either way; it depends on your specific injury and job.
What to do next
Gather your pre-accident income evidence early, since employment and business records can be harder to obtain the longer you wait. The general deadline to bring a personal injury claim is six years from the accident[3]. A claim like this benefits from being built while your work history and medical evidence are both fresh.
If the underlying injury is a permanent one, permanent disability explains how that finding shapes the wider claim.
Common questions
What is the difference between loss of earnings and loss of earning capacity?
Loss of earnings covers income you have already missed between the accident and trial or settlement. Loss of earning capacity looks forward, at how the injury reduces what you can realistically earn in the years ahead, and the two are worked out differently.
I am back at my old job. Can I still claim for loss of earning capacity?
Possibly, if the injury leaves you at a real disadvantage should you ever need to find new work, for example being less able to compete for jobs needing physical fitness. Your medical evidence needs to support this genuine risk, not just describe symptoms in general terms.
How is this actually calculated, since there is no fixed figure?
The court looks at your income before the accident, your age, and how the injury has changed your realistic working life, up to a general cutoff age of 60. It does not use a public formula that gives an exact number in advance, since it depends on your specific evidence.
What if I am self-employed and do not have a fixed salary?
This makes the evidence more important, not less possible. Business records, tax filings, invoices and bank statements from before the accident help establish what you were realistically earning, which a claim needs in place of a standard payslip.
Sources
- Skrine, The Civil Law (Amendment) Act 2019 Age limit raised from 55 to 60, in force 1 September 2019 (Act A1591) (accessed 2026-09-22)
- Malaysian Bar Council Circular No. 255/2018 (Revised Compendium of Personal Injury Awards, 2018) (accessed 2026-09-22)
- Limitation Act 1953, s.6(1)(a) (Government of Malaysia) (accessed 2026-09-22)