Road Accident Fund Crisis Deepens: Major Reforms Proposed as RAF Remains Insolvent Despite R33.5bn Payouts

The Road Accident Fund (RAF) continues to face unprecedented challenges in February 2026, with parliamentary hearings revealing the depth of the crisis facing South Africa’s compensation system for road accident victims. Despite paying out R33.5 billion in claims during the 2025/26 financial year, the fund remains technically insolvent, prompting urgent calls for systemic reform.

RABS Bill Proposes Revolutionary No-Fault System

The transport department has thrown its weight behind the Road Accident Benefit Scheme (RABS) Bill, which proposes a complete overhaul of how road accident victims are compensated in South Africa. First introduced in 2013, the bill has gained renewed urgency as the RAF’s financial crisis deepens.

Deputy Transport Minister Mkhuleko Hlengwa told Parliament’s Standing Committee on Public Accounts (SCOPA) that the new scheme would introduce several key changes:

• No-fault compensation system: Victims would no longer need to prove who caused an accident to receive compensation
• Monthly payments instead of lump sums: The current system of one-off payments would be replaced with smaller monthly annuities
• Restricted eligibility: Only South Africans and legal foreigners with insurance would qualify for benefits
• Age limitations: Claims for loss of income would be limited to people under 60
• Travel insurance requirements: Foreign nationals would need travel insurance when entering the country

RAF’s Financial Crisis: R100 Billion in Liabilities

The scale of the RAF’s financial challenges became starkly apparent during recent SCOPA hearings. Interim board chairperson Kenneth Brown revealed that the fund’s liabilities are estimated at around R100 billion, with a “requested but not yet paid” (RNYP) liability of R17.8 billion as of January 27, 2026.

Despite increasing claims payments from R28.4 billion in 2024/25 to R33.5 billion in 2025/26, the RAF remains structurally constrained. Brown emphasized the fundamental mismatch between the fund’s fixed revenue from fuel levies and escalating liabilities.

Key Financial Challenges:

• Road accidents cost South Africa between R205-260 billion annually
• The RAF pays R45-50 billion per year in claims
• Approximately 25% of payouts (R12.5 billion) goes to attorneys under the contingency fee system
• Default judgments reached R6.6 billion in the previous year, accumulating to R15 billion
• Over 50 employees remain on paid suspension without finalized disciplinary outcomes

Parliamentary Oversight and Governance Concerns

SCOPA’s inquiry has exposed significant governance failures within the RAF, including concerns about ministerial interference and operational inefficiencies. The fund has been operating under an interim board since August 2025, highlighting the instability in its leadership structure.

Alfredina Themba, chair of the audit and risk committee, made a frank admission to Parliament: “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.”

The Electric Vehicle Challenge

Adding to the RAF’s woes is the looming threat posed by the transition to electric vehicles. The fund’s reliance on fuel levy revenue faces a structural challenge as South Africa moves toward cleaner transportation technologies, potentially reducing the fund’s primary income source.

Legal System Strain and Tribunal Proposals

The State Attorney has called for the establishment of a dedicated Road Accident Fund tribunal to address the thousands of RAF cases clogging the court system. This proposal aims to streamline the claims process and reduce the administrative burden on the regular court system.

Impact on Claimants and Victims

The RAF’s financial difficulties have real-world consequences for road accident victims. With settlements taking an average of five years and a backlog of 320,000 claims, many victims face prolonged waits for compensation. The proposed RABS system aims to address these delays through a more streamlined, no-fault approach.

Looking Ahead: Reform or Collapse?

As South Africa grapples with the RAF crisis, the urgency for reform has never been greater. The RABS Bill represents a potential lifeline, but its implementation faces significant challenges, including:

• Legislative approval and implementation timelines
• Managing legacy claims under the current system
• Ensuring adequate funding for the new scheme
• Addressing concerns about reduced benefits for victims

Deputy Minister Hlengwa emphasized that the solution extends beyond just reforming the RAF: “We are asking how we can build an ecosystem that prevents accidents from occurring in the first place.”

Conclusion

The Road Accident Fund’s crisis represents one of South Africa’s most pressing governance and financial challenges. With liabilities far exceeding revenue and no easy solutions in sight, the proposed RABS Bill may be the fund’s last hope for sustainability. However, the success of any reform will depend on political will, adequate funding mechanisms, and a commitment to serving the needs of road accident victims.

As Parliament continues its oversight role through SCOPA hearings, the coming months will be crucial in determining whether South Africa can salvage its road accident compensation system or face the prospect of complete systemic failure.

Stay updated with the latest developments in the Road Accident Fund crisis by following our ongoing coverage of this critical issue affecting millions of South Africans.