Road Accident Fund in Crisis: Court Rulings, R500bn Liabilities & Funding Reform – May 2026 Update

Road Accident Fund South Africa: Latest News & Developments – 28 May 2026

South Africa’s Road Accident Fund (RAF) is facing one of the most turbulent periods in its history. A series of landmark court rulings, a ballooning contingent liability now estimated at over R500 billion, and urgent calls for structural reform have placed the fund squarely in the national spotlight. Here is a comprehensive overview of the most important RAF news and developments as of 28 May 2026.

1. SCA Ruling: RAF1 Form Declared Unlawful – Government Bailout Looms

In one of the most consequential legal setbacks for the RAF in recent memory, the Supreme Court of Appeal (SCA) dismissed the RAF’s appeal against a High Court judgment that declared the RAF’s Board Notice and its RAF1 Form unconstitutional, unlawful, and invalid. The SCA dismissed the appeal with costs.

The ruling, handed down by SCA Judge Caroline Nicholls (with four other judges concurring), found that:

• The RAF exceeded its powers by issuing the Board Notice without statutory authorisation.
• The RAF1 Form placed substantial impediments in the way of accident victims’ claims through more stringent requirements.
• The Minister of Transport’s decision to approve and gazette the RAF1 Form was unlawful, as there was no rational connection between the decision and the purpose of the RAF Act.

The practical consequence is enormous. Legal experts estimate that the RAF has approximately R500 billion in unqualified contingencies, a significant portion of which stems from the fund rejecting claims that complied with the RAF Act but not the now-invalidated Board Notice. Attorney Gert Nel of Gert Nel Inc Attorneys noted that his firm alone holds a book in excess of R100 million in default court orders against the RAF — and that is just one of many law firms in the same position.

“Treasury will definitely have to get involved with a bailout to cover these additional expenses,” Nel warned.

The 2026 Budget Review confirmed that the RAF accounts for 85.5% of total social security fund liabilities, equivalent to R370.3 billion at the end of 2024/25. The RAF’s liabilities are projected to increase to R422.6 billion by 2027/28.

2. Foreign Nationals Ruling: R390 Million in New Liability

Adding further financial pressure, the SCA ruled in April 2026 that the RAF must compensate all road accident victims, including undocumented foreign nationals. The court found that the phrase “any person” in the RAF Act includes undocumented foreigners, striking down a RAF directive that required foreign nationals to prove legal presence in South Africa at the time of injury.

Transport Minister Barbara Creecy revealed that approximately R390 million in claims previously classified as non-payable could now become payable following the judgment. These claims were listed on the RAF’s Requested Not Yet Paid (RNYP) register as relating to undocumented foreigners.

“According to the latest version of the RNYP register, a total of R390 million relates to illegal foreigners. These have been deemed non-payable matters, but the Supreme Court of Appeal ruling makes them payable,” Minister Creecy stated.

The RAF Board is still taking legal advice on whether to seek leave to appeal the ruling at the Constitutional Court. In a notable development, the RAF was subsequently granted leave by the Constitutional Court to appeal the SCA’s foreign nationals ruling — meaning the matter is not yet finally resolved.

Parliament’s Portfolio Committee on Transport Chairperson, Mr Donald Selamolela, welcomed the SCA ruling, calling it a long-overdue recognition that the RAF is an institutional service delivery mechanism for all vulnerable road users, regardless of nationality. He called for a review and update of RAF legislation to formally accommodate foreign nationals, citing Botswana and Namibia as examples where foreign visitors are required to take out short-term insurance cover before entering the country.

3. Proposed New Funding Model: Vehicle Licence Disc Fee

With the RAF’s current funding model — a levy on petrol and diesel prices — under increasing strain, the Department of Transport is exploring a new vehicle owner contributory scheme. Minister Creecy confirmed in an exclusive interview that motorists may in future be required to pay a separate RAF contribution when they first buy and annually renew their vehicle licence disc.

The DoT has two key concerns driving this proposal:

1. The rise of electric vehicles (EVs): As EV adoption grows, fewer motorists will pay the fuel levy, eroding the RAF’s primary income stream.
2. The RAF’s unsustainable contingent liability: The fund’s financial position is expected to deteriorate significantly over the medium term.

The proposed scheme would complement the planned reintroduction of the Road Accident Benefit Scheme (RABS) Bill, which aims to introduce a no-fault system with a standard schedule of benefits. However, critics — including DA Scopa member Patrick Atkinson — have warned that running two parallel schemes (the current RAF and the new RABS) could cost between R70 billion and R80 billion per month, far exceeding the RAF’s current monthly fuel levy income of approximately R48 billion.

The proposal has drawn significant public criticism, with many South Africans arguing that motorists already pay a RAF levy through the fuel price and should not be taxed twice.

4. SCOPA Oversight Inquiry: Governance Failures and Excess Payments

Parliament’s Standing Committee on Public Accounts (Scopa) is conducting an ongoing oversight inquiry into the affairs of the RAF. The inquiry has already uncovered nearly R23 billion in excess payments over a two-year period and is probing alleged corruption between judges and lawyers involved in RAF claims.

Scopa has warned that the RAF’s current funding model is financially unsustainable and has raised serious concerns about the fund’s governance. The committee is also examining the conduct of former RAF executives, with calls for criminal charges to be laid against those responsible for implementing the unlawful RAF1 Form without following due legal process.

5. Key Court Rulings at a Glance (2026)

6. What Does This Mean for RAF Claimants?

If you have a pending or previously rejected RAF claim, the recent court rulings may significantly affect your case:

• Claims rejected due to the RAF1 Form: These claims may now be payable. However, claims on which default judgment has already been granted cannot simply be relodged — attorneys are calling for a six-month window period for claimants to register existing court orders.
• Claims by foreign nationals: The SCA ruling opens the door for undocumented foreign nationals to claim, though the matter is still being contested at the Constitutional Court level.
• Delays in payment: The RAF’s financial position means that even successful claimants may face significant delays in receiving compensation.

If you believe you have a valid RAF claim, it is advisable to consult a qualified attorney who specialises in RAF matters as soon as possible.

7. The Road Ahead: Reform or Collapse?

The RAF finds itself at a crossroads. The fund’s liabilities are growing faster than its income, court rulings continue to expand its obligations, and governance failures have eroded public trust. The key reform proposals currently on the table include:

• Reintroduction of the RABS Bill — a no-fault, fixed-benefit system to replace the current fault-based, open-ended compensation model.
• A vehicle owner contributory scheme — a new annual fee linked to vehicle licence renewals.
• A possible government bailout — with National Treasury increasingly likely to need to intervene to stabilise the fund’s finances.
• Legislative reform — updating the RAF Act to address the foreign nationals issue and other gaps exposed by recent court rulings.

The RAF’s future will depend on whether government can implement meaningful structural reform before the fund’s financial position becomes irretrievable. With liabilities projected to reach R422.6 billion by 2027/28 — and potentially far higher if all pending claims are accounted for — the urgency could not be greater.

Frequently Asked Questions (FAQ)

What is the Road Accident Fund (RAF)?

The Road Accident Fund is a South African state entity that provides compensation to victims of road accidents. It is funded primarily through a levy on petrol and diesel prices.

How do I claim from the RAF?

You can submit a claim directly to the RAF or through an attorney. Claims must generally be lodged within three years of the accident. Given the complexity of the process and recent legal changes, it is strongly recommended to use a qualified RAF attorney.

Is the RAF going bankrupt?

The RAF is not technically bankrupt, but its liabilities far exceed its assets. The 2025 Medium-Term Budget Policy Statement described the RAF as a “significant fiscal risk” and warned that its financial position is expected to deteriorate over the medium term. A government bailout is increasingly likely.

Can foreign nationals claim from the RAF?

Following the April 2026 SCA ruling, undocumented foreign nationals are entitled to claim from the RAF. However, the RAF has been granted leave to appeal this ruling at the Constitutional Court, so the final legal position is not yet settled.

What is the RABS Bill?

The Road Accident Benefit Scheme (RABS) Bill proposes replacing the current fault-based RAF system with a no-fault, fixed-benefit scheme. It is expected to be reintroduced to Parliament in the near future.

Sources: Moneyweb, IOL Business, Parliament of South Africa, Politicsweb, Webber Wentzel. This article is for informational purposes only and does not constitute legal advice. Published: 28 May 2026.