Road Accident Fund Crisis 2025: Major Governance Overhaul, R19 Billion Claims Payment Plan, and Parliamentary Inquiry

Road Accident Fund Faces Unprecedented Transformation in 2025

The Road Accident Fund (RAF) is undergoing its most significant transformation in recent history, with dramatic changes unfolding throughout 2025. From board dissolution to ambitious payment plans and parliamentary inquiries, the state-owned entity is at a critical crossroads that will determine its future viability.

Minister Dissolves RAF Board Amid Governance Crisis

In July 2025, Transport Minister Barbara Creecy took the unprecedented step of dissolving the entire RAF Board of Directors, citing persistent governance and operational challenges that severely undermined the fund’s ability to fulfill its statutory mandate.

Key Governance Failures That Led to Board Dissolution:

• Costly Litigation: Protracted and expensive legal battles over accounting standards that drained financial resources
• CEO Suspension Mishandling: Inconsistent and reckless handling of the Chief Executive Officer’s suspension, leading to legal challenges
• Default Judgments: Frequent court defaults that exacerbated contingent liabilities and weakened financial sustainability
• Board Division: Deep internal divisions with most resolutions requiring casting votes rather than consensus
• Critical Vacancies: Failure to fill essential positions including Chief Claims Officer and Head of Legal

Interim Board’s Ambitious R19 Billion Payment Plan

The newly appointed interim board has announced dramatic changes, including an aggressive plan to pay nearly R19 billion in outstanding claims older than 180 days, starting from September 2025. This represents a significant shift from the previous administration’s approach.

New Strategic Direction:

• Moving away from litigation-heavy approach to claims management
• Fast-tracking settlement of prepared claims
• Establishing block settlement drives in regional offices
• Engaging with attorney associations to improve relationships

SCOPA Parliamentary Inquiry Launched

The Standing Committee on Public Accounts (SCOPA) has launched a comprehensive inquiry into the RAF’s financial matters, scheduled to begin in mid-September 2025 and conclude by October 2025.

Inquiry Focus Areas:

• Allegations of maladministration and financial mismanagement
• Wasteful and reckless expenditure
• Impropriety and misuse of public funds
• Accountability measures for public money usage

High Court Challenges and Legal Setbacks

Recent court developments have added pressure to the RAF’s already precarious financial position. The fund failed in its urgent bid to extend the 180-day payment moratorium, with the High Court delivering significant blows that may push the organization closer to collapse.

Settlement Drives and Community Outreach

Despite the challenges, the RAF has been actively pursuing settlement drives across the country:

• Pretoria Regional Office: Block settlement drive for claims ready for payment
• Community Engagement: Partnership with local radio stations for public assistance
• Attorney Collaboration: Urgent meetings with legal associations to improve claim processing

Medical Schemes Demand R2.3 Billion Settlement

The Healthcare Funders Association, representing 20 medical schemes, has called on Parliament to order the RAF to settle outstanding claims valued at more than R2.3 billion, adding to the mounting pressure on the fund.

Road Accident Benefit Scheme Bill Progress

Minister Creecy has emphasized the department’s commitment to finalizing the Road Accident Benefit Scheme Bill, which will introduce a no-fault system designed to make it easier for road accident victims to access benefits without costly legal procedures.

Expert Advisory Committee and SIU Investigation

To support the development of a sustainable operational model, the Minister has initiated:

• Appointment of an independent expert advisory committee
• Request for SIU investigation expansion to cover recent events
• Transparent recruitment process for new board members

What This Means for RAF Claimants

The current developments present both opportunities and challenges for RAF claimants:

Positive Developments:

• Commitment to paying R19 billion in outstanding claims
• Improved engagement with legal representatives
• Focus on settlement rather than litigation
• Parliamentary oversight ensuring accountability

Ongoing Concerns:

• Financial sustainability questions
• Governance instability during transition
• Court challenges affecting operations
• Mounting pressure from multiple stakeholders

Looking Ahead: The Road to Recovery

The RAF’s transformation in 2025 represents a critical juncture for South Africa’s road accident compensation system. Success will depend on:

• Effective implementation of the new payment strategy
• Successful completion of the SCOPA inquiry
• Appointment of a competent new board
• Passage of the Road Accident Benefit Scheme Bill
• Sustainable financial management practices

As the situation continues to evolve, stakeholders across the legal, medical, and insurance sectors are watching closely to see whether these reforms will finally address the RAF’s long-standing challenges and provide the relief that road accident victims desperately need.

Stay updated with the latest RAF developments as this story continues to unfold throughout 2025.