RAF Crisis Update: New Board Plans R19 Billion Claims Payout After Court Ruling

Road Accident Fund Faces Major Overhaul as New Leadership Takes Charge

The South African Road Accident Fund (RAF) is undergoing dramatic changes following the appointment of a new interim board and a critical High Court ruling that has intensified pressure on the financially distressed entity.

New Board Commits to Aggressive R19 Billion Payout

Interim board chair Kenneth Brown has announced plans to aggressively begin paying nearly R19 billion in outstanding claims older than 180 days starting from October 2025. This represents a significant shift for the RAF, which has struggled with massive backlogs and governance issues.

“Our intention, once we have dotted all the ‘i’s’ and crossed all the ‘t’s’, is to start repayments aggressively from October onwards,” Brown stated.

High Court Rejects Payment Moratorium Extension

The RAF suffered a major legal setback when Judge Jabulani Nyathi struck down the fund’s application for extending its 180-day payment moratorium. This means the RAF must now pay claims within 14 calendar days instead of six months.

The ruling comes as the RAF faces:

• R10.4 billion in unpaid claims
• Total claims liability of R40.4 billion
• Technical insolvency with a R27.8 billion accumulated deficit

Governance Crisis and Leadership Changes

The current situation follows a series of governance failures:

• June 2025: CEO Collins Letsoalo suspended
• July 2025: Minister Barbara Creecy dissolved the entire board
• August 2025: New interim board appointed

RABS Bill and Future Reforms

Minister Creecy plans to finalize the Road Accident Benefit Scheme (RABS) Bill, introducing a no-fault system to replace the current fault-based approach. This aims to make it easier for accident victims to access benefits while reducing legal costs.

Industry Impact and Stakeholder Response

Legal associations have cautiously welcomed the new board’s approach. The Pretoria Attorneys Association noted “a clear meeting of the minds” during recent discussions, while acknowledging the urgent need for reform.

Looking Forward

The RAF’s new leadership faces the challenge of modernizing claims processing while managing immediate financial pressures. Success in implementing the aggressive payment strategy will be crucial for restoring confidence in South Africa’s road accident compensation system.

This developing story highlights the ongoing challenges facing South Africa’s Road Accident Fund and the critical reforms needed to ensure sustainable operations.