Road Ac­ci­dent Fund bil­lions in the red

Weekend Argus (Saturday Edition) - - FRONT PAGE - FA­TIMA SCHROEDER

THE WHEELS have come off at the Road Ac­ci­dent Fund (RAF), which says it is pay­ing out more to ac­ci­dent vic­tims than it is re­ceiv­ing from the fuel levy ev­ery month. And, if the levy were to be in­creased to make the RAF sus­tain­able, no one could af­ford to drive.

That was the grim mes­sage this week from RAF se­nior man­ager Chris Willemse.

He and other fund per­son­nel told jour­nal­ists that the RAF was tech­ni­cally in­sol­vent, hav­ing ac­cu­mu­lated “un­funded” li­a­bil­i­ties of a stag­ger­ing R145 bil­lion. The R3bn it got monthly from the fuel levy did not cover the claims it had to pay out. In June, for ex­am­ple, these came to more than R9.5bn.

How­ever, le­gal pro­fes­sion­als coun­tered that the fund’s bank­ruptcy claims were noth­ing but a ploy to push through the con­tro­ver­sial Road Ac­ci­dent Fund Ben­e­fit Scheme (RABS) Bill, which has met with fierce op­po­si­tion.

The pro­posed leg­is­la­tion works on a “no fault” sys­tem, pay­ing out only cer­tain pre-de­fined and limited ben­e­fits. The pay-outs do not take in­di­vid­ual cir­cum­stances into ac­count.

The bill has been re­jected twice by the Port­fo­lio Com­mit­tee on Trans­port.

Per­sonal in­jury lawyer Tzvi Brivik dis­missed the fund’s claimed bank­ruptcy as non­sense.

“The more mo­torists there are on the road, the more levies the fund re­ceives,” he said.

The pri­mary source of in­come for the RAF is a levy on fuel, set an­nu­ally by the Trea­sury. Cur­rently, that levy is 154c/litre.

RAF chief mar­ket­ing man­ager Phumi Dhlomo pre­sented fig­ures to show that be­cause of a zero cent in­crease in the fuel levy, “it is clear that the RAF’s fi­nan­cial chal­lenges are here to stay”.

Brivik said the RAF leg­is­la­tion made pro­vi­sion for pay­ment within 14 days, but the fund was in­stead tak­ing 120 days or longer. Even when claimants gave the fund an in­dul­gence, it still did not pay by the agreed date.

Brivik said he had many clients whose claims had been set­tled but who were yet to be paid. The out­stand­ing pay­ments arose ei­ther out of set­tle­ments or judg­ments, which are or­ders of court.

The fund has re­sponded that it has in­suf­fi­cient funds.

At the brief­ing, the RAF said it had spent more than R5bn in le­gal costs and R4.5bn on set­tling writs of ex­e­cu­tion is­sued against it.

fa­tima.schroeder@inl.co.za

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