The transport department says remodelling the Road Accident Fund (RAF) system to pay only small monthly sums to claimants, exclude illegal foreigners, and limit claims from hit-and-run crash victims can stabilise the fund’s cash flow.
The department told parliament’s standing committee on public accounts yesterday that it supports the Road Accident Benefit Scheme (RABS) Bill aimed at overhauling how victims of road accidents are compensated.
The new scheme would scrap the existing method of paying a one-off lump sum to victims in favour of smaller monthly payments. It also limits payments to South Africans and legal foreigners with insurance and would limit claims for loss of income to people under 60.
@sowetan1981 The Road Accident Fund (RAF) interim board has told parliament that even if the fund saves money internally, it still won’t cover the massive growing claims bill. Video: @Sinazo Magaba Kos Reporter: @Koena Mashale #roadaccidentfundsouthafrica #southafrica #fyp #viral ♬ original sound - sowetan1981
First introduced in 2013, the bill was at the centre of the committee’s discussions yesterday between deputy transport minister Mkhuleko Hlengwa and acting transport director-general Mathabatha Mokonyama.
Hlengwa said the bill is intended to ease the growing financial strain on the RAF, which has been flagged as unsustainable under its current funding model.
Road accidents cost SA between R205bn and R260bn a year, placing immense pressure on the RAF, which relies heavily on the fuel levy for income.
The bill proposes a no-fault system, meaning road accident victims will no longer have to prove who caused a crash to receive compensation.
“The key point here is this: among other objectives, the RABS Bill seeks to introduce a no-fault system, to cap benefits, and to provide a schedule of defined benefits within the Act in order to regularise the system,” Hlengwa said.
“It also proposes that foreign nationals must have travel insurance when entering the country. This means that visa requirements, in cooperation with home affairs, will also have to be reviewed, as this remains a significant problem within the RAF ecosystem.”
Hlengwa added that the bill proposes the payment of benefits in annuities.
“Lump-sum payments have proven to be problematic. However, we must not view the RAF or RABS ecosystem as a silver bullet. In the first instance, it is a reactive mechanism to a crash, injury or fatality.”
Hlengwa said the transport department’s primary responsibility is to fund traffic law enforcement.
“[...] and strengthen road safety operations as preventative interventions to reduce the strain placed on the Road Accident Fund. We therefore need to look at this as a broader ecosystem. We are not looking at reforms confined only to what happens within the RAF. We are asking how we can build an ecosystem that prevents accidents from occurring in the first place,” Hlengwa said.
Sowetan
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