Accident fund to set stringent payout rules
‘We are a social security system. We shouldn’t be making instant millionaires’
PRETORIA: The days of the Road Accident Fund (RAF) being thought of as an instant millionaire maker are numbered, as the entity looks to curb its R145 billion debt.
Chief executive officer Yolande van Biljon said the RAF’s only real recourse at turning things around was the implementation of the road accident benefit scheme.
This would be cheaper and allow for the RAF cash flow constraints legacy to be dealt with.
“We’ve found a prevalence of more expensive claims, medical inflation and higher registration of claims that we had not anticipate. “Having no increase being budgeted for this year provides us with a level of financial difficulty. In fact, our biggest disruption is the sheriff who can attach any of our assets including our bank accounts, but we try to do our best.”
Yesterday executive members detailed how they were seeking to improve the operations of the entity with the aim of bringing about easier access for road accident victims.
General manager of legal, compliance and regulation at RAF, Charlene Louw, said through many commissions over the years, it was realised that the system was inefficient, lacked sustainability and affordability.
Louw said the likelihood of people getting less compensation was likely with the introduction of the new scheme once it is finally approved.
“We are saying we are a social security system; we shouldn’t be making instant millionaires of people. It’s not the way social systems work. You ought to be actually compensating for medical health, funeral support, income support and if there is a deceased breadwinner we would look after the family thereafter.
“Yes, people will receive less, but then more individuals will get to benefit from this service and that is the point of it all.”
Another positive change, Louw noted, would be that people would not be paid out their money in a lump sum, but as a monthly stipend which would enable particularly those without proper financial literacy to sustain themselves for longer.
The benefit scheme is still a few years off and needing to go through the necessary parliamentary process before it could be implemented.
The RAF Amendment Bill, however, will meet this year’s parliamentary time table and serve as a precursor of the changes the parastatal hopes to make in the long run of creating more efficiency in servicing the public.
Through this legislation, people can lodge a 30-day no fault medical claim, and a 30-day funeral claim, as the fund would be allowed to make changes to forms without parliamentary and public processes.
A list of deemed serious injuries would be established allowing claimants to short-circuit the process without further medical probe being required.
“With an established list the injury will be noted and if it is on the list we can short-circuit the process.”