Transport Minister Fikile Mbalula says the Road Accident Fund (RAF) is faced with legal and administrative costs which have put the fund in an unsustainable financial position. Mbalula says the 2021/22 performance agreement that he has signed with the RAF board includes the approval of a new business operating model, settling of new personal claims within 120 days, accelerating the settlements of claims three years and older, and reducing legal costs among other priorities.
Mbalula was briefing the media on the RAF’s financial position in Centurion, north of Johannesburg.
“The RAF has operated on a financially unsustainable model for a number of decades. There’s not been a nexus on the fuel levy and the number of accidents that occur on public roads. However to exacerbate these challenges, there has been the ever increasing administrative costs of the RAF scheme. Of the revenue RAF collects, more than R17 billion or 40% goes to administrative costs, with only R26 billion or 60% is received by claimants, currently the RAF’s biggest cost driver is the number of accidents that occur on public roads.” says Fikile Mbalula.
VIDEO: RAF aims to settle and pay out claims in a short space of time