Government developing new road accident rules in South Africa
The government is developing new policies to restructure the existing Road Accident Fund (RAF) scheme and how money is paid out.
The Road Accident Fund was established to provide compensation for loss or damage wrongfully caused on the road. The compensation is to provide relief to those whose livelihoods have been disrupted, or lives lost as a consequence of a crash on the country’s roads, said transport minister Fikile Mbalula in a media briefing on Friday (4 March).
However, Mbalula noted that the fund has experienced significant fiscal problems in recent years due to costly litigation battles, steep administration costs, and the high number of accidents seen on the country’s roads.
“Of the revenue that the RAF collects, more than R17 billion or 40% goes to administrative costs with only R26 billion or 60% actually received by claimants. Currently, the RAF’s biggest cost driver is the number of road accidents that occur on public roads daily,” he said.
He added that of the R41 billion fuel levy the fund receives, R10.6 billion goes towards legal costs. A further R26 billion paid is a further “success fee” to the attorneys.
“Bringing the RAF back to financial stability requires both a regulatory overhaul and operational improvement. The regulatory overhaul is mandated by the Road Accident Benefit Scheme (RABS) Policy, which requires of us to complete the transformation of the RAF into a benefits scheme that is fully integrated into the broader social security net.”
This policy proposes that RABS should provide a scheme of structured and defined benefits to those seriously affected by road accidents in accordance with social insurance principles, and not liability insurance principles, he said.
“By not providing a benefit to the full extent of the loss, RABS will encourage the injured person to return to work and will reduce a culture of dependency.”
“We have given the green light to the (RAF) Board to move with speed in adopting a new business operating model, and it is currently seized with its implementation.”
He added that the policy is currently be being reviewed so the RAF pays clients directly and not through law firms.
This Policy proposes that RABS should provide a scheme of structured and defined benefits to those seriously affected by road accidents in accordance with social insurance principles, and not liability insurance principles.
RAF CEO explains – Video 1 of 2 pic.twitter.com/9OqnyI82FF
— FIKILE MBALULA | MR FIX (@MbalulaFikile) March 4, 2022
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