Road Accident Fund Crisis Deepens: R19 Billion Claims Backlog and New Leadership Changes in September 2025

RAF Faces Critical Juncture as New Board Promises Aggressive Payment Strategy

The Road Accident Fund (RAF) in South Africa is experiencing its most challenging period yet, with a staggering R19 billion in outstanding claims and significant governance upheavals that have reshaped the organization’s leadership structure in 2025.

New Interim Board Takes Charge Amid Financial Crisis

Following the dissolution of the entire RAF board by Transport Minister Barbara Creecy in July 2025, a new interim board led by Chairman Kenneth Brown has taken control of the financially distressed fund. The new leadership faces the monumental task of addressing nearly R19 billion in outstanding claims that are older than 180 days.

Brown announced that the interim board plans to “aggressively begin paying” these outstanding claims starting from October 2025, marking a significant shift in the fund’s approach to claim settlements.

High Court Ruling Intensifies Pressure

The RAF’s financial woes were compounded when Judge Jabulani Nyathi struck down the fund’s application for extending its 180-day payment moratorium. This High Court ruling means the RAF must now settle claims within 14 calendar days instead of the previous six-month period.

The ruling places enormous pressure on the fund, which reported:

• R10.4 billion in unpaid claims at the end of March 2025
• Total claims liability of R40.4 billion
• An accumulated deficit of R27.8 billion
• Technical insolvency with liabilities exceeding assets by R27.7 billion

Governance Vacuum and Leadership Changes

The RAF has experienced significant leadership turbulence in 2025:

Key Timeline of Events:

• June 2025: CEO Collins Letsoalo suspended for insubordination
• July 2025: Minister Creecy dissolves entire RAF board due to persistent governance failures
• August 2025: New interim board and chairperson appointed
• September 2025: High Court dismisses moratorium extension application

Financial Challenges and Revenue Issues

The RAF’s financial difficulties have been exacerbated by several factors:

Revenue Constraints: The fund’s revenue is tied to fuel levy collections rather than actual accident risk, creating a structural funding problem. The situation worsened when SARS withheld R5.07 billion from fuel levy payments to pay Eskom, despite being interdicted from doing so.

Current Financial Position:

• Current assets: R13.8 billion (including R2.1 billion in cash)
• Fuel levy receivables: R11.9 billion
• Annual deficit: R2.3 billion in 2025

Settlement Drive and Block Payments

In response to the crisis, the RAF has initiated several measures:

Pretoria Regional Office Block Settlement Drive: The RAF Pretoria office announced a fast-track settlement program for claims ready for payment, demonstrating the fund’s commitment to reducing the backlog.

Stakeholder Engagement: The new interim board has been actively engaging with attorney associations and sheriffs to find collaborative solutions to the claims crisis.

Road Accident Benefit Scheme (RABS) Bill

Minister Creecy continues to push for the implementation of the Road Accident Benefit Scheme (RABS) Bill, which would replace the current fault-based system with a no-fault scheme. This proposed legislation aims to:

• Make it easier for road accident victims to access benefits
• Standardize benefit payments
• Reduce costly legal processes

However, the legal fraternity and RAF stakeholders generally oppose the RABS Bill, preferring reforms to the current system.

Parliamentary Inquiry Launched

The Standing Committee on Public Accounts (SCOPA) has launched a full parliamentary inquiry into RAF financial matters, with proceedings scheduled to begin in mid-September 2025. The inquiry aims to investigate the fund’s financial management and governance issues.

Impact on Claimants and Service Providers

The RAF crisis affects more than just claimants. The fund owes approximately R2 billion to service providers, including:

• Healthcare providers
• Hospices
• Physiotherapists
• Other medical service providers

Looking Forward: Modernization Plans

Chairman Kenneth Brown has outlined ambitious plans for RAF modernization, including:

• Implementation of technology-driven “cradle to grave” claims processing
• Integration with first responders to initiate claims processes immediately after accidents
• Comprehensive system overhaul to improve efficiency

What This Means for Road Accident Victims

For South Africans who may need to claim from the RAF, these developments signal both challenges and potential improvements:

Short-term challenges:

• Continued delays in claim payments
• Uncertainty about the fund’s stability
• Potential for further legal complications

Long-term prospects:

• New leadership committed to reform
• Modernization of claims processing systems
• Potential implementation of RABS for streamlined benefits

Conclusion

The Road Accident Fund crisis of 2025 represents a critical juncture for South Africa’s road accident compensation system. With R19 billion in outstanding claims and new leadership promising aggressive action, the coming months will be crucial in determining whether the RAF can overcome its financial and governance challenges.

The success of the interim board’s strategy will depend on their ability to secure adequate funding, implement efficient payment systems, and restore confidence among stakeholders. For road accident victims and their families, the hope is that these reforms will lead to faster, more reliable access to the compensation they desperately need.

Stay updated on the latest RAF developments and South African financial news by following our blog for regular updates on this evolving situation.