Road Accident Fund Crisis in South Africa: Latest Updates and Key Issues in 2026

Understanding the Road Accident Fund Crisis

South Africa’s Road Accident Fund (RAF) is facing an unprecedented financial and governance crisis that threatens to leave thousands of accident victims without compensation. As of 2026, the fund’s liabilities have ballooned to over R500 billion, while its assets stand at just R33 billion—meaning the RAF owes 15 times more than it owns. This critical situation has prompted Parliament’s Standing Committee on Public Accounts (SCOPA) to launch a comprehensive inquiry into maladministration, financial impropriety, and the misuse of public funds.

The Financial Crisis: A Broken Safety Net

The RAF was established to ensure that anyone injured or killed on South African roads would not face financial ruin. Funded through a fuel levy of R2.18 per litre, the system was designed to provide a safety net for all road users. However, the levy has been frozen since 2019, even as medical and legal costs have soared exponentially.

The Auditor-General has repeatedly warned that the RAF’s finances are “not fairly presented” and flagged “material uncertainty” over its continued existence. The fund’s own strategic plan concludes it is “unlikely to survive the next five years without legislative reform.”

Governance Failures and Corruption Allegations

The crisis extends beyond mere financial mismanagement. Anti-corruption watchdog Organisation Undoing Tax Abuse (Outa) has blamed poor leadership, weak governance, and faulty administrative processes for the dire state of the RAF. Key issues include:

• Leadership Failures: Former RAF CEO Collins Letsoalo faced allegations of procurement irregularities and questionable spending, including R10 million on personal security arrangements and a R4 million armoured BMW.
• Accounting Irregularities: The RAF used IPSAS 42 accounting standards instead of mandated GRAP standards, artificially reducing reported liabilities from R330 billion to R27 billion—effectively erasing over R300 billion from the books.
• Procurement Abuse: The Special Investigating Unit (SIU) found procurement irregularities allegedly exceeding R1 billion, with money flowing to attorneys’ family members and even to family trusts of RAF executives.
• Default Judgments: Default judgments against the RAF jumped from R1.64 billion in 2023/24 to R3.99 billion in 2024/25, partly because the fund employs only one legal representative for every 1,500 cases.

The Human Cost: Victims Left Stranded

While politicians and administrators debate reforms, thousands of accident victims remain trapped in a system that has failed them. SCOPA chairperson Songezo Zibi describes the situation as leaving “people stranded between injury and dignity.”

Victims like Sipho Mdluli, injured in 2021 when a drunk driver hit his taxi, are still waiting years for multi-million rand claims. The impact has been devastating: lost livelihoods, shattered families, and inability to access essential services like wheelchairs, caregivers, and therapy.

“A broken RAF means it’s going to be very difficult for a lot of people,” Zibi told media. “Right now there are people who need wheelchairs, but they don’t have them. Someone who is a victim of a road accident needs a caregiver right now, and they can’t afford one.”

SCOPA’s Parliamentary Inquiry: Exposing the Crisis

Parliament’s Standing Committee on Public Accounts has launched a comprehensive inquiry into the RAF’s collapse. The inquiry has revealed:

• The fund is functionally insolvent by its own admission
• Massive unpaid claims and serious procurement irregularities
• Unrecorded liabilities potentially exceeding R500 billion—nearly a fifth of the national budget
• The Auditor-General confirmed that the total unrecorded liabilities cannot be estimated

ActionSA Member of Parliament Alan Beesley warned that “nobody knows how deep this hole is” and called the situation “one of the most serious financial misstatements by any state entity in democratic South Africa.”

The Root Problem: A Flawed System

The RAF’s fundamental contradiction lies in its design. The fund operates as social insurance—drivers pay into it through the fuel levy—but it’s built on a fault-based legal system inherited from common law delicts. This means claimants must prove negligence on the part of the other party, turning what should be a straightforward social insurance payout into a legal battle.

The RAF is simultaneously a social welfare provider and an indemnity insurer for negligent drivers. In its 2023/24 financials, the fund paid R103.1 million in corporate legal services on panel attorneys for just one year. The system was designed to incentivise the very litigation that bankrupts it.

Proposed Reforms: The Road Accident Benefit Scheme (RABS)

Minister of Transport Barbara Creecy’s long-term solution is to finalise the Road Accident Benefit Scheme (RABS) Bill, which would replace the fault-based system with a no-fault social security scheme featuring defined benefits and structured payouts.

This addresses the core problem: a no-fault system would eliminate the need to prove negligence, reducing legal costs and speeding up compensation. However, the RABS Bill has faced fierce backlash from legal experts and civil society who argue it could reduce victim benefits.

Alternative Solutions: Restructuring the Funding Model

SCOPA’s Songezo Zibi has proposed several reforms beyond the RABS Bill:

• Structured Payments: Instead of large lump-sum payouts, move to structured monthly or annual payments to manage cash flow pressures.
• Voucher System: Issue vouchers for medical services instead of cash to prevent misuse of funds.
• Third-Party Insurance Integration: Build third-party insurance into vehicle licensing fees rather than relying solely on the fuel levy. “If I’m driving and cause an accident, the RAF indemnifies me by paying the people I’ve injured,” Zibi explained. “But what should happen is that part of your licence fee becomes your insurance premium.”
• Fuel Levy Increase: While the levy has been frozen since 2019, some stakeholders argue it must be increased to meet growing obligations.

Industry Perspectives: The Road Freight Association’s View

Gavin Kelly, CEO of the Road Freight Association, argues that the RAF has strayed far from its founding purpose. “The Road Accident Fund was designed to replace the compulsory Third Party Licence by accessing an allocation from every litre of fuel sold,” Kelly told media.

“Over the past few decades, the RAF has become embroiled in battles between the legal fraternity, claimants, and the State whose funds did not reach crash victims, but were sidelined into other pockets.”

The RFA has proposed that the RAF process be run by current short-term insurers, who have both the capacity to collect and deal with claims, as was done before the advent of the RAF.

Recent Developments and Record Payouts

Amid growing criticism, the RAF announced a record one-day payout of R694 million in 2025, claiming to have disbursed R17.3 billion since April as part of a turnaround plan. The fund also paid R4.18 billion in September alone.

“Dignity continues to be restored to thousands of claimants,” the RAF stated, pledging faster claims processing and stronger governance. However, critics warn that faster payments alone will not solve a structural deficit or a broken law.

Looking Forward: What Needs to Change

For the RAF to survive and serve its intended purpose, several critical changes are necessary:

• Implementation of the RABS Bill to move from a fault-based to a no-fault system
• Restructuring of the funding model to include third-party insurance
• Strengthened governance and accountability mechanisms
• Resolution of the fuel levy freeze and potential increase
• Implementation of the Integrated Claims Management System (ICMS) with reliable, auditable data
• Completion of SCOPA’s inquiry and implementation of recommendations

Conclusion: A System at a Crossroads

The Road Accident Fund crisis represents one of South Africa’s most pressing governance and social justice challenges. With over R500 billion in liabilities and thousands of accident victims waiting for compensation, the status quo is unsustainable.

While Minister Creecy has shown decisive action in dissolving the RAF board and appointing an interim leadership, the fundamental question remains: will Parliament have the political will to implement the legislative reforms necessary to save the fund?

As SCOPA’s inquiry continues and reform proposals are debated, one thing is clear: South Africa’s promise of protection for road-crash victims must be restored. Until that happens, the fund remains a broken safety net, leaving people stranded between injury and dignity.