Road Accident Fund Crisis Deepens: New RABS Bill Proposes Major Reforms as RAF Faces R100 Billion Liability

South Africa’s Road Accident Fund (RAF) is facing its most critical period yet, with recent parliamentary hearings revealing the extent of the organization’s financial crisis and proposed reforms that could fundamentally change how road accident victims receive compensation.

RAF’s Staggering R100 Billion Liability Crisis

The Road Accident Fund’s financial situation has reached crisis levels, with liabilities estimated at approximately R100 billion as of December 2025. During frank exchanges with Parliament’s Standing Committee on Public Accounts (SCOPA) in February 2026, RAF interim board chairperson Kenneth Brown admitted there was no clear solution to the fund’s solvency problems.

“There’s no solution. I don’t even want to lie. If anyone can come and sit here and tell us there’s a solution,” said Ntina Themba, chairperson of the audit and risk committee, highlighting the desperate nature of the RAF’s financial predicament.

Road Accident Benefit Scheme (RABS) Bill: A Proposed Solution

The transport department is pushing forward with the Road Accident Benefit Scheme (RABS) Bill, first introduced in 2013, as a potential solution to the RAF’s mounting problems. Deputy Transport Minister Mkhuleko Hlengwa outlined key provisions of the bill during parliamentary hearings:

Key Features of the RABS Bill:

• No-fault system: Road accident victims will no longer need to prove who caused a crash to receive compensation
• Monthly payments instead of lump sums: The new system proposes paying benefits in monthly annuities rather than one-off payments
• Eligibility restrictions: Limited to South Africans and legal foreigners with insurance
• Age limitations: Claims for loss of income restricted to people under 60
• Travel insurance requirement: Foreign nationals must have travel insurance when entering the country
• Benefit caps: Introduction of standardized and capped payouts

The True Cost of Road Accidents in South Africa

Road accidents cost South Africa between R205 billion and R260 billion annually, when healthcare, trauma response, and related costs are factored in. This massive financial burden places enormous strain on the RAF, which relies heavily on the fuel levy for income.

The current funding model has proven inadequate, with a significant mismatch between contributions made through the fuel levy and the benefits paid to road accident victims.

Parliamentary Oversight and Accountability

SCOPA has been conducting intensive hearings into maladministration at the RAF, with the interim board unable to provide definitive figures on the extent of liabilities. The hearings have revealed:

• Technical bankruptcy of the RAF
• Ongoing investigations into R1 billion media contracts
• Systemic issues with claims processing
• Delays affecting the most vulnerable claimants

Why Shutting Down RAF Is Not an Option

Deputy Minister Hlengwa emphasized that completely shutting down the RAF would disproportionately impact South Africa’s poorest citizens. “While shutting down the RAF entirely is not an option because the poorest of the poor would be hardest hit,” he stated, acknowledging that these vulnerable groups remain most disadvantaged by slow claims processing and burdensome proof requirements.

Broader Road Safety Ecosystem Approach

The government is advocating for a comprehensive approach to road safety that goes beyond just reforming the RAF:

Preventative Measures Include:

• Stricter traffic law enforcement
• Amendments to the National Road Traffic Act
• Proposed zero-alcohol limit for drivers
• Enhanced road safety operations
• Focus on preventing accidents rather than just responding to them

“Our primary responsibility as a country is to fund traffic law enforcement and strengthen road safety operations as preventative interventions to reduce the strain placed on the RAF,” Hlengwa explained.

Impact on Road Accident Victims

The proposed changes would significantly alter how road accident victims receive compensation:

• Faster processing: No-fault system could speed up claims
• Predictable income: Monthly payments instead of lump sums
• Limited coverage: Stricter eligibility criteria may exclude some claimants
• Standardized benefits: Capped payouts could reduce compensation for severe cases

Looking Ahead: The Future of Road Accident Compensation

As South Africa grapples with the RAF crisis, several key developments are expected:

1. Legislative progress: The RABS Bill requires parliamentary approval and implementation
2. Funding model review: Alternative funding mechanisms beyond the fuel levy
3. System overhaul: Complete restructuring of how claims are processed and paid
4. Prevention focus: Increased investment in road safety measures

Conclusion

The Road Accident Fund’s crisis represents one of South Africa’s most pressing fiscal challenges. With R100 billion in liabilities and no easy solutions, the proposed RABS Bill offers a potential path forward, albeit one that will fundamentally change how road accident victims receive compensation.

The success of these reforms will depend on effective implementation, adequate funding mechanisms, and a genuine commitment to both supporting accident victims and preventing future crashes. As parliamentary processes continue, all stakeholders must work together to ensure that any new system serves the needs of South Africa’s most vulnerable road users while maintaining fiscal sustainability.

Stay updated on the latest Road Accident Fund developments and South African transport policy changes by following our regular news coverage.