Road Accident Fund Crisis: Major Changes Ahead as New Leadership Tackles R19 Billion Claims Backlog

RAF Faces Critical Juncture as New Interim Board Takes Control

The Road Accident Fund (RAF) in South Africa is undergoing dramatic changes as new interim leadership promises to aggressively tackle a staggering R19 billion backlog in outstanding claims. This development comes after months of governance turmoil that saw Transport Minister Barbara Creecy dissolve the entire RAF board in July 2025.

New Leadership Promises Aggressive Action

Kenneth Brown, the new interim board chairperson, has announced ambitious plans to begin paying nearly R19 billion in outstanding claims older than 180 days starting from October 2025. This represents a significant shift from the fund’s previous approach and signals a commitment to addressing the mounting crisis that has left thousands of road accident victims waiting for compensation.

“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 following urgent meetings with attorney associations and sheriffs.

High Court Ruling Increases Pressure

The RAF’s challenges intensified when the High Court in Pretoria dismissed the fund’s urgent application for an extension of the 180-day payment moratorium. Judge Jabulani Nyathi struck the application from the court roll due to a lack of urgency, meaning the RAF must now pay claims within 14 calendar days instead of the previous six-month period.

This ruling has placed enormous pressure on the financially distressed 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

Board Dissolution and Governance Crisis

Minister Barbara Creecy’s decision to dissolve the RAF board in July 2025 followed persistent governance failures, including:

• Protracted and costly litigation that strained financial resources
• Inconsistent handling of the CEO suspension
• Frequent default judgments against the RAF
• Deep divisions within the board requiring casting votes for resolutions
• Failure to fill critical executive positions

The dissolution came after the suspension of RAF CEO Collins Letsoalo in June 2025 for insubordination, adding to the institutional uncertainty.

Settlement Drives and Modernization Efforts

Despite the challenges, the RAF has initiated several settlement drives to address the claims backlog. The Pretoria Regional Office announced a block settlement drive in August 2025, requiring law firms to submit up to 10 prepared claims for expedited processing.

The new interim board is also considering comprehensive modernization of the RAF’s claims system, moving toward a “cradle to grave” approach that would use technology to initiate claims processing from the moment an accident occurs.

Financial Sustainability Concerns

The RAF’s financial model faces significant challenges, with revenues tied to fuel levy collections rather than accident risk. The fund reported:

• Current assets of R13.8 billion, including R2.1 billion in cash
• R11.9 billion in fuel levy receivables
• Outstanding debts to service providers of approximately R2 billion

The situation was further complicated when SARS deducted R5.07 billion from fuel levy payments to pay Eskom, despite being interdicted from doing so.

Road Accident Benefit Scheme (RABS) on the Horizon

Minister Creecy has reiterated her department’s intention to finalize the Road Accident Benefit Scheme (RABS) Bill, which would introduce a no-fault system to make it easier for road accident victims to access benefits without costly legal proceedings. However, this proposal faces opposition from the legal fraternity and other RAF stakeholders.

Parliamentary Inquiry Launched

The Standing Committee on Public Accounts (SCOPA) has launched a full parliamentary inquiry into the RAF’s financial matters, aiming to complete the investigation by the end of October 2025. This inquiry will examine the fund’s governance, financial management, and operational challenges.

Impact on Road Accident Victims

The RAF crisis has had severe implications for road accident victims, many of whom are disabled or unable to work. Attorney associations have described the situation as “heartless and inhumane,” with seriously injured victims facing prolonged delays in receiving compensation needed for medical care and rehabilitation.

Looking Forward: Challenges and Opportunities

The new interim board faces the monumental task of:

• Implementing a sustainable payment schedule for R19 billion in outstanding claims
• Modernizing the claims processing system
• Restoring stakeholder confidence
• Ensuring compliance with court orders
• Preparing for potential transition to the RABS system

Brown acknowledged the scale of the challenge, stating: “We need to fix the organisation piece by piece, and part of fixing it involves starting by at least paying all outstanding creditors.”

Conclusion

The Road Accident Fund stands at a critical crossroads, with new leadership promising dramatic changes to address decades of mismanagement and financial distress. While the challenges are enormous, the commitment to aggressive action on outstanding claims and system modernization offers hope for the thousands of road accident victims awaiting compensation.

The success of these reforms will depend on the interim board’s ability to implement sustainable solutions while navigating complex legal, financial, and political pressures. The coming months will be crucial in determining whether the RAF can fulfill its constitutional mandate to provide social security and healthcare access for road accident victims.