RAF is technically insolvent

2013-09-28 00:00

CAPE TOWN — The Road Accident Fund (RAF) is technically insolvent, with liabilities of R51 billion more than its assets.

Accident victims and their families are having to wait ever longer to be paid out by the fund, sometimes years.

An investigation by sister paper Beeld found that at the end of the financial year in March 2013, the RAF had 280 000 arrear claims on its books. In 2012, this figure was 265 000 and in 2011, 245 000.

The DA’s Greg Krumbock points out that R51 billion is almost 10% of South Africa’s annual budget.

Legal costs are a heavy burden on the the fund.

Transport Minister Dipuo Peters said in answer to a parliamentary question that 10 years ago, the fund paid out R516 million in legal costs. Last year, that figure was R2,35 billion.

In 2003, she said, the fund paid out R2,4 billion to claimants. Last year, the pay-outs totalled R11,3 billion.

RAF spokesperson Linda Rulashe maintained the fund can meet its liabilities, but didn’t deny the high burden, which she ascribed to actuarial projections.

“Last year, the fund paid out R15 billion on 227 000 claims.”

However, the National Treasury is concerned.

Spokesperson Jabulani Sikhakhane said the outstanding liabilities have arisen over many years. He said they are a function of the compensation scheme currently mandated by law.

“The cabinet has just approved a new compensation scheme that will control liabilities,” he said.

He confirmed that already approved claims will have to be covered.

Rulashe said the fund does not need a cash injection, and has reserves of R6 billion.

Last year, the fund received R17,3 billion from fuel levies, which stood at 88c a litre.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24


Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.