The Department of Social Development (DSD) says the Road Accident Fund (RAF) will be transformed from its current form to a more equitable model to benefit victims of crashes.
The department recently proposed that workers should pay 12 percent of their salaries to social security and retirement funds.
However, analysts are skeptical about the benefits of the new proposal.
The department’s Deputy Director-General Brenda Sibeko says currently a large amount of money goes to legal fees, administration and not to the intended beneficiaries.
Sibeko says, “If you are poor and you don’t have a good lawyer you get a small benefit. So what we are saying is that we need to create an equitable system that is there for everybody. That is affordable and does not pay in amounts to people on the basis of how good their lawyers are. We have to make sure that the majority of the money does not go necessarily to lawyers and intermediaries but it actually goes to people who have experienced an accident.
Of the revenue collected, approximately R17 billion (40%) of this goes to administrative costs, with only R26 billion (60%) received by claimants. Currently, the RAF’s biggest cost driver is the number of road accidents that occur on public roads daily. https://t.co/aLYqj30E6n pic.twitter.com/dVOp70kqh6
— |Mr Fix (@MbalulaFikile) August 18, 2021
Road Accident Fund reduces liability to R20 billion:
RAF in June said it posted a surplus of R3.2 billion for the 2020/2021 financial year. This follows a deficit of R5.2 billion the previous year.
The entity has been battling financially over the years as a result of more claims from road crashes as well as fraudulent claims.
The gradual stabilising of the entity has been attributed to a new board that was appointed in 2019.
REDUCING THE LIABILITY OF THE ROAD ACCIDENT FUND
We are on the right path and we will continue to work towards a sustainable and equitable road accident benefit scheme. pic.twitter.com/Q68u5yyjeQ
— |Mr Fix (@MbalulaFikile) June 7, 2021
Major strategic developments at RAF
