Road accident claims now expected to top R100bn by 2024 – with no plan yet on how to pay
- Claims against the Road Accident Fund (RAF) are now expected to top R100 billion by the 2023/2024 financial year.
- By then, the latest projections have it, the RAF's liabilities will easily top half a trillion rand – while its assets won't move much from the current R7.7 billion.
- Treasury is rather keen for Parliament to move ahead with changes to SA's approach to supporting the victims of car crashes.
- For more stories go to www.BusinessInsider.co.za.
It has been 19 years since a commission recommended replacing the current Road Accident Fund (RAF) structure with a no-fault system that would provide "equitable, sustainable and affordable support to accident victims", the national Treasury said in it budget review this week.
But in September 2020, Parliament threw out legislation to achieve that, leaving the current RAF system unchanged. And that system is in trouble.
By the end of 2023/2024 financial year, South African victims of motor vehicle accidents are expected to be filing claims against it worth more than R100 billion every year.
That will push the RAF's accumulated deficit to well over half a trillion rand, or R518.7 billion by current projections. That would make the RAF contingent liability on the national books far larger than that ascribed to Eskom.
In the current financial year, the RAF's total assets are estimated to be worth R7.7 billion, and increases in the fuel levy that funds it will not help much.
And as claims mount, there is still no firm plan on how to deal with the shortfall between assets and liabilities.
"The National Treasury is considering options to address the RAF’s accumulated liability," the department said in its review. "The intention is to pay down claims over a reasonable period of time."
In the meanwhile it recommended that Parliament reconsider the Road Accident Benefit Scheme it threw out, which is intended to move the treatment of road accidents from one where the RAF is liable for medical expenses and lost income, to "one based on social security principles".
(Compiled by Phillip de Wet)
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