Michigan No-Fault Law and What It Means To Your Wages?
MCL. 500. 3107(1) (b) states that economic benefits include 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.”
Michigan no-fault law provides that a person who is injured in an automobile accident may recover benefits for work loss in a variety of different situations. This benefit, as well as the other 3 major no-fault benefits, is paid regardless of who is at fault in the accident. It might surprise some as to how extensive these benefits can be and include persons who haven’t even begun a job at the time of the accident and persons who are fired while on disability.
Some of the hallmarks to note regarding work loss are as follows:
- Work loss benefits are payable for only 3 years from the date of accident;
- Work loss does not include any loss after the date on which the injured person dies;
- The benefits received from personal protection insurance for loss of income are not taxable income and therefore the benefits payable for such loss of income shall be reduced 15% unless the claimant can present proof to the insurer that the pay a lower income tax than the 15%;
- Benefits payable for work loss sustained in a single 30 day period and the income earned by an insured person for work during that period together shall not exceed $5392.00. (This amount is adjusted each year by the Legislature.);
- The work loss benefits from no-fault are available for an injured person who is temporarily unemployed at the time of the accident or during the period of disability and shall be based on earned income for the last month employed full time preceding the accident;
- Benefits are payable in work loss to the injured person who was not working at the time of the accident but has proved that he would have been employed but for the car accident and the injury he received;
- Work loss benefits are recoverable by the injured person who, while they were disabled, was fired from their job due to their inability to work. The no-fault insurance carrier must continue the wage loss benefits as long as the now, no longer disabled person, is taking reasonable steps to find employment.
- Work loss benefits paid may be reduced by subtracting benefits paid by other sources including insurance companies, social security etc. However, many insurance companies attempt to reduce work loss benefits by improper means such as reducing by vacation pay and/or direct employer contributions to wage loss that are not considered insurance policies.