by The Road Accident Fund (RAF) has been forced to tell its claimants and service providers that it can no longer pay out as the account has been frozen.
“Payments have ground to a halt due to the RAF’s bank account being attached by the Sheriff of the Court‚” said CEO Dr Eugene Watson.
“This is a result of a few legal firms whose actions have disrupted an established cash management plan, which now inconsiderately prioritises them over those who have patiently been awaiting payment.”
The Purpose Of The RAF
The Road Accident Fund has been a vital source to those who need to claim as a result of a:
- Bodily injury in the accident (except a driver who was the sole cause of the accident).
- Dependent of a deceased breadwinner.
- Close relative of the deceased who paid for the funeral.
- Claimant under the age of 18 years being assisted by a parent, legal guardian, or curator ad litem.
Watson refers to the RAF “the caring arm of government”.
The Current Financial Situation
The fund’s monthly income of R3 billion from the fuel levy has been used to make 30 000 monthly payments. But, according to Watson, “it’s not nearly enough”.
“A balance of R8‚2 billion worth of payments to 5200 creditors remains queued for payment over and above all that is paid.”
The attachment‚ removal, and sale of RAF assets was thus, “an unfortunate common reality”‚ Watson said.
“This reality has persisted, despite a 50c increase in the RAF fuel levy two years ago. The fund can only pay what it is able to. The cash management plan put in place two years ago endeavours to maintain regular payments to creditors.”
This latest attachment has badly disrupted the fund’s bid to fulfil its mandate. Namely, “to indemnify‚ compensate, and rehabilitate car crash victims” – despite the ongoing lack of funds‚ he said.
“We apologise for any inconvenience caused. Every effort is being made to resolve the matter speedily in order for the RAF to resume payments.”
Watson also said the halt in payments, ongoing cash constraints, and the “huge‚ unfounded liability” the minister of finance raised in the medium-term Budget speech were “continued evidence that the RAF dispensation is expensive‚ unaffordable, and unsustainable”.
