Road Accident Fund Crisis Deepens: R19 Billion Outstanding Claims and New Leadership Changes – September 2025 Update

Major Developments in South Africa’s Road Accident Fund Crisis

The Road Accident Fund (RAF) continues to face unprecedented challenges in September 2025, with nearly R19 billion in outstanding claims and significant leadership changes promising dramatic reforms. Recent developments suggest both crisis and opportunity for South Africa’s critical road accident compensation system.

New Interim Board Promises Aggressive Payment Strategy

Under new interim chair Kenneth Brown, the RAF’s restructured board has committed to aggressively addressing the massive backlog of unpaid claims. The interim board plans to begin paying nearly R19 billion in outstanding claims older than 180 days starting from October 2025.

“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 in recent meetings with attorney associations.

High Court Ruling Increases Pressure

The RAF suffered a significant legal setback when Judge Jabulani Nyathi struck down their application for extending the 180-day payment moratorium. This ruling means the RAF must now settle claims within 14 calendar days instead of the previous six-month period.

The High Court’s decision places enormous pressure on the fund, which remains technically insolvent with:

• R10.4 billion in unpaid claims as of March 2025
• R40.4 billion in total claims liability
• R27.8 billion accumulated deficit
• Only R2.1 billion in available cash

Governance Overhaul and Leadership Changes

Transport Minister Barbara Creecy dissolved the entire RAF board in July 2025 due to persistent governance failures. Key leadership changes include:

• Suspension of CEO Collins Letsoalo in June 2025 for insubordination
• Appointment of Phathutshedzo Lukhwareni as acting CEO
• Installation of Kenneth Brown as interim board chair in August 2025
• Complete board restructuring to address governance vacuum

Settlement Drive and Modernization Plans

The RAF has launched several initiatives to address the crisis:

Block Settlement Drive

The RAF Pretoria Regional Office announced a block settlement drive in August 2025, allowing law firms to submit up to 10 prepared claims for swift processing.

Technology Modernization

The new board is considering comprehensive modernization of the claims system, implementing “cradle to grave” technology solutions that would integrate with first responders to initiate claims processing immediately after accidents.

Financial Challenges and SARS Dispute

The RAF’s financial position remains precarious, exacerbated by ongoing disputes with the South African Revenue Service (SARS). Key financial challenges include:

• SARS deducted R5.07 billion from fuel levy payments to pay Eskom
• Revenue tied to fuel sales rather than accident risk
• Outstanding payments to healthcare providers and service suppliers totaling R2 billion

Road Accident Benefit Scheme (RABS) Bill Controversy

Minister Creecy continues to push for the Road Accident Benefit Scheme Bill, which would replace the current fault-based system with a no-fault scheme. The legal fraternity generally opposes this legislation, preferring reforms to the existing system.

Impact on Road Accident Victims

The crisis significantly affects road accident victims across South Africa:

• Delayed compensation for seriously injured claimants
• Increased legal costs due to prolonged litigation
• Healthcare providers struggling with unpaid RAF claims
• Attorneys facing cash flow problems due to delayed payments

Attorney Associations’ Response

Legal representatives have expressed cautious optimism about the new leadership. Conrad van der Vyver from the Pretoria Attorneys Association noted “a clear meeting of the minds” with the new interim chair, describing the approach as “a genuine breath of fresh air.”

However, attorneys remain concerned about the RAF’s history of non-compliance with court orders and the massive scale of outstanding claims.

Looking Forward: October 2025 Implementation

The interim board has committed to presenting a detailed implementation plan by October 2025, including:

• Structured payment schedule for R19 billion in outstanding claims
• Cash flow management strategies
• Financing solutions for immediate payments
• Long-term sustainability measures

Key Takeaways for Stakeholders

For Road Accident Victims: New leadership promises faster claim processing, but financial constraints remain significant.

For Legal Practitioners: Improved cooperation expected, but cash flow challenges likely to continue in the short term.

For Healthcare Providers: Priority focus on clearing R2 billion in outstanding supplier payments.

For Government: Urgent need for sustainable funding model and regulatory framework completion.

Conclusion

The Road Accident Fund crisis represents one of South Africa’s most significant administrative and financial challenges. While new leadership brings hope for reform, the scale of outstanding claims and structural funding issues require comprehensive solutions.

The success of the October 2025 implementation plan will be crucial for determining whether the RAF can avoid collapse and continue serving South Africa’s road accident victims effectively.

Stay updated on Road Accident Fund developments and South African legal news by following our regular coverage of this evolving story.