Almost R140 billion paid out by Road Accident Fund in three years

The Road Accident Fund (RAF) pays out the equivalent of R4 000 for every registered motorised vehicle in the country.

Minister of Transport Barbara Creecy relayed the amounts generated by the fund as well as the claim payout figures via a written response to a parliamentary question earlier in November.

In the three years listed by Creecy, the RAF had also received adverse outcomes from the Auditor-General of South Africa (AGSA).

R139 billion paid out in three years

The RAF was established in the mid-nineties via the RAF Act of 1996 and goes hand in hand with the Customs and Excise Act of 1964.

Funds for the RAF are raised via a levy attached to the fuel price where R2.18 of every litre of petrol purchased from the 11.8 million registered vehicles as of 31 December 2023.

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From this, the RAF raised R145 billion over the last three years. In 2024, the RAF paid out R45 billion in claims, which was down by R600 million from the previous year.

Combined over the last three years, the RAF paid R139.1 billion to claimants.

Claimant compensation costs include loss of earnings and support, general damages and funeral support, while also covering medical costs and legal costs.

Legal costs average R5 billion for each of the last three financial years, with medical costs fluctuating between R1.6 billion and R2 billion per year.

Claim-by-claim basis

The RAF levy is one of the two highest levies on petrol and is separate from the general fuel levy, which is currently set at R3.85 per litre.

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The RAF assists those injured in motor vehicle accidents as well as families who suffered financial loss due to the death of loved one on the roads — all adjudicated on a claim-by-claim basis.

“The Road Accident Fund can be seen as something similar to an insurance fund. It is therefore not for them to rule in anybody’s favour,” Johan Cilliers of Cilliers and Associates explained to The Citizen.

“Upon receipt of a claim they will assess same and decide whether they want to engage in settlement discussions or not,” he added.

Rethinking funding model

Deputy Minister of Transport Mkhuleko Hlengwa told the Standing Committee on Public Accounts (Scopa) in October that the ministry is reviewing the RAF’s funding model and poor audit outcomes.

The auditing discrepancies have been attributed to the RAF’s refusal to conform with National Treasury mandates, despite rulings in the High Court and Supreme Court of Appeal (SCA).  

 The Raf uses the International Public Sector Accounting Standards 42 and not the Generally Recognised Accounting Practice that is prescribed by the Public Finance Management Act.

The RAF told Scopa in October that it had applied to the Judge President of the SCA for reconsideration.

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