The Road Accident Fund (RAF) is R272 billion in arrears. This was revealed at a media engagement session hosted by RAF on 4 July at their Polokwane Office on Grobler Street.
The engagement was in an effort to reach out to the public and share as much information about RAF and the new developments in the organisation. The fund is an organisation that compensates people for loss or damage in a motor vehicle accident at which they are not at fault.
Victims of injury can claim directly and people who have lost a loved one can also claim. It generally covers medical expenses, loss of income, general damage for serious injuries and also to assist with the loss of support, funeral costs, access to rehabilitation as well to support those will need caregivers.
The fund has been insolvent since 1981 due to its legislative framework and the net deficit continues to climb and was sitting at R206,3 billion in the 2017/18 financial year. They are further experiencing challenges where they have attachments by the sheriff on the RAF’s bank and call accounts. RAF is also facing threats of attachment and removal of movable property.
The RAF is funded the fuel levy and receives R3,5 billion a month which is nowhere near covering the amount needed to cover the shortfall.
The Acting CEO of RAF, Lindelwa Xingwana-Jabavu explained that the organisation’s efficiency is leading to its downfall. “We have become our own enemies.
We have become so productive that the rate of claims processing and getting them ready for payment is faster and more than what we receive per month to make those payments,” she said.
In order to ease the burden on the institution, there is a proposed change in legislation to allow payments to be made monthly rather than in bulk.
She shared that they have proposed a change in legislation to assist RAF, one of the things proposed is payment of claims being made in monthly instalments, which she explained doesn’t help the organisation alone but also the claimants.
We are hoping to also eliminate the need for lawyers to claim by simplifying the claiming process. “Our focus going forward, following the change of legislation will be on rehabilitation of payments.
Most countries have gone that route, they don’t focus on paying a lump sum because when we pay a lump sum, three years down the line, the money is finished then they come back to social services,” she explained.