Explanation of Process for Computing Presumed Economic Loss
(Revised August 27, 2002)
The calculation of presumed economic loss will use the following procedures and
assumptions for death claims:
1. Establish the victim’s age and compensable income.1 Income will be determined based on
the claimant’s submissions. Generally, the Special Master will consider the past three years
of income data. For some cases the most recent year will be the primary basis of the award -
other claims may require analysis of trends adjusted to current dollars. The Special Master
adopted this approach as the one likely to be more favorable to claimants because it relies on
recent salaries which were relatively high during the past few years.
2. Determine after-tax compensable income by applying the average effective combined
federal, state and local income tax rate for the victim’s income bracket currently applicable in
the state of the victim’s domicile for tax purposes, state and locality. The Special Master will
consider the victim’s tax returns as well as effective income tax rates derived from published
Internal Revenue Service (IRS) data on selected income and tax items for Individual Income
Tax Returns by state.2 Effective income tax rates derived from IRS data for New York are
attached as Table 1.
3. Add the value of employer provided benefits. These benefits will be set at actual levels if
data are provided. If the claimant does not provide data, the pension is assumed at 4% of
pension-eligible compensable income and medical benefits are assumed to be $2,400 per year
in current year dollars and will be adjusted for applicable inflation. (To prepare the
presumed award tables, the Special Master assumed that individuals would have benefits
equal to 4% of compensable income and medical benefits of $2,400 per year.)
4. Determine a measure of the victim’s expected remaining years of workforce participation
using the tabulated work-life expectancies for the victim’s age contained in the publicat