Big freeze on strained Road Accident Fund
The Road Accident Fund on Friday announced that its bank account had been attached by the Sheriff of the Court, thus being unable to payout to thousand of South Africans
FRIDAY spelled disaster for the Road Accident Fund (RAF) and the thousands of South Africans who rely on the state insurer’s monthly payouts.
CEO Dr Eugene Watson announced that payments have ground to a halt owing to the RAF’s bank account being attached by the Sheriff of the Court.
‘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.’
According to Watson, the fund’s monthly income of R3-billion from the fuel levy has been used to make 30 000 monthly payments‚ but it’s not nearly enough.
‘A balance of R8.2-billion worth of payments to 5 200 creditors remains queued for payment over and above all that is paid.
‘This reality has persisted despite a 50c increase in the RAF fuel levy two years ago,’ said Watson
‘The fund can only pay what it is able to and the cash management plan put in place two years ago endeavours to maintain regular payments to creditors.
‘We apologise for any inconvenience caused and every effort is being made to resolve the matter speedily in order for the RAF to resume payments.
‘The immediate payment halt‚ continued cash constraints and the huge‚ unfounded liability the Minister of Finance raised in the medium -term budget speech are continued evidence that the RAF dispensation is expensive‚ unaffordable and unsustainable.’
Saw it coming?
Early last month Watson spoke out against the disturbing proportions of car accidents and fatalities in the country, duly noting that if not curbed it will place untold strain on the RAF.
‘The death of bread winners, heads of families and economically active youth at the threshold of their lives, as well as innocent young children and toddlers, weighs heavily on our country, sets society back and harms our economy,’ Watson said in a statement.
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