Road Accident Fund (RAF) in Crisis: Court Rulings, Bailout Fears & Reform Updates – June 2026

The Road Accident Fund (RAF) continues to dominate South African headlines in 2026, with a series of landmark court rulings, mounting financial liabilities, governance shake-ups, and urgent calls for reform. As of June 13, 2026, the fund — which compensates road accident victims across South Africa — is navigating one of the most turbulent periods in its history. Here is a comprehensive overview of the latest developments.

1. RAF Faces R390 Million Liability After Landmark Court Ruling on Foreign Nationals

One of the most significant recent developments is a Supreme Court of Appeal (SCA) ruling 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 claimants to prove legal presence in South Africa at the time of the accident.

Transport Minister Barbara Creecy has revealed that this ruling could expose the RAF to at least R390 million in additional liability. According to the latest Requested Not Yet Paid (RNYP) register, approximately R390 million in claims previously classified as non-payable could now become payable.

“According to the latest version of the Requested Not Yet Paid 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 seeking legal advice on whether to appeal the ruling at the Constitutional Court. Parliament’s Transport Committee Chairperson welcomed the ruling, emphasising that “RAF funding is intended for victims of road accidents, a purpose for which no one should interfere based on nationality.”

2. Government Bailout Looms as RAF Liabilities Approach R500 Billion

The RAF’s financial position has deteriorated dramatically, with experts and legal professionals warning that a major government bailout is increasingly inevitable. The fund is estimated to carry approximately R500 billion in unqualified contingencies — a staggering figure that dwarfs the financial burdens posed by other struggling state-owned entities.

The crisis was deepened when the SCA dismissed the RAF’s appeal against a High Court judgment that declared its Board Notice and RAF1 Form unconstitutional, unlawful, and invalid. The RAF had introduced this form in 2022, and it is estimated that around 600,000 claims were rejected because they did not comply with the form — even though they were valid under the RAF Act itself.

Attorney Gert Nel of Gert Nel Inc Attorneys, a leading firm in RAF claims, explained the severity: “Treasury will definitely have to get involved with a bailout to cover these additional expenses.” His firm alone is running a book in excess of R100 million in unpaid claims with default court orders in place.

ActionSA MP Alan Beesley has called on the Finance Minister to explain how the national fiscus plans to absorb these liabilities, estimating the impact of the unlawful RAF1 Form ruling at close to R180 billion. He warned this could push the RAF’s total liabilities to more than half a trillion rand — exceeding the financial burden of Eskom and Transnet combined.

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 2025 Medium-Term Budget Policy Statement projected RAF liabilities to increase from R369.7 billion in 2024/25 to R422.6 billion by 2027/28.

3. The Unlawful RAF1 Form: A Parallel Claims System That Backfired

Central to the RAF’s current financial crisis is the unlawful RAF1 Form, introduced in 2022 via a Board Notice. The SCA ruled that the RAF exceeded its powers in issuing this form without statutory authorisation, and that the form did not facilitate efficient claims administration — rather, it created administrative hurdles to reduce the number of claims submitted.

SCA Judge Caroline Nicholls, with four concurring judges, found that the minister’s decision to approve and gazette the RAF1 form was “fatally flawed for want of procedural fairness” and lacked a rational connection to the purpose of the RAF Act, which is to compensate accident victims.

Attorney Gert Nel described how the RAF effectively created a “parallel claims system” by refusing to register claims that did not comply with the Board Notice. Claimants’ attorneys continued to lodge claims via registered post (as permitted by the RAF Act), obtained default judgments, and these claims are now immediately payable — creating an enormous and immediate financial burden on the fund.

4. Governance Crisis: Executive Suspensions and Leadership Instability

The RAF has also been rocked by serious governance failures and leadership instability. In late 2025, the interim board — appointed after Transport Minister Creecy dissolved the previous board in July 2025 citing “ongoing governance and operational failures” — suspended four senior executives, including:

• Acting CEO Phathutshedzo Lukhwareni
• Chief Financial Officer Bernice Potgieter
• Chief Governance Officer Mampe Kumalo
• The Head of the CEO’s Office

Interim board chairperson Kenneth Brown defended the suspensions, citing serious governance concerns, a history of misleading information, and supply chain management irregularities. He alleged that executives had attempted to get the board to sign affidavits containing “egregious misrepresentations,” including false claims that the board had agreed to extend a 180-day moratorium.

Parliament’s Portfolio Committee on Transport questioned the timing of the suspensions, which occurred just before the board was due to present the RAF’s annual audit report. Committee Chairperson Donald Selamolela warned that the board must avoid becoming a source of instability.

The RAF has had four CEOs in seven months, reflecting the depth of the leadership crisis. Former CEO Collins Letsoalo‘s five-year contract expired in August 2025, and he was formally suspended before that for insubordination after failing to appear before SCOPA.

5. SCOPA Inquiry and Parliamentary Oversight

Parliament’s Standing Committee on Public Accounts (SCOPA) is conducting an ongoing oversight inquiry into the RAF, probing governance failures, financial mismanagement, litigation handling, missed court appearances, and rising liabilities. The inquiry has also been tasked with investigating alleged corruption between judges and lawyers in RAF-related matters.

SCOPA has noted that the RAF has accumulated nearly R23 billion in excess payments over two years and has repeatedly failed to abide by court orders. In one notable case, the SCA ordered the RAF to pay Sunshine Hospital more than R92 million within seven days after the fund refused to comply with 181 court orders in the hospital’s favour.

6. Signs of Recovery and Reform Plans

Despite the dire financial picture, there are some positive signals. Transport Committee Chairperson Donald Selamolela stated in February 2026 that the RAF is “on the road to recovery,” acknowledging that governance improvements and operational stabilisation are underway.

Deputy Minister of Transport Mkhuleko Hlengwa has outlined key reform priorities:

• Finalising the Road Accident Benefits Scheme (RABS) Bill for submission to Cabinet, which aims to introduce a no-fault, defined-benefit, annuity-based payment system
• Clearing the RAF’s massive claims backlog, with a target of paying out more than R4 billion per month over eight months
• Conducting Settlement Drives in underserved communities, including at Ngwelezane Hospital in February 2026
• Filling key vacancies, including the permanent CEO position
• Reviewing RAF legislation to close legal loopholes

The RAF’s Strategic Plan 2025–2030 also outlines a long-term vision for financial sustainability and improved service delivery to road accident victims across South Africa.

7. What This Means for Road Accident Victims and Claimants

For South Africans who have been injured in road accidents, these developments have significant practical implications:

• Previously rejected claims based on the unlawful RAF1 Form may now be resubmitted and could be payable
• Undocumented foreign nationals injured in road accidents in South Africa are now entitled to claim compensation
• The RAF’s Settlement Drive initiative is bringing claims processing closer to communities, particularly in rural and underserved areas
• Claimants with default judgments in their favour should engage their attorneys to ensure these are registered and paid
• The ongoing RABS Bill reform could fundamentally change how compensation is calculated and paid in future

Key Takeaways: RAF News Summary – June 2026

Conclusion

The Road Accident Fund remains one of South Africa’s most pressing fiscal and governance challenges. With liabilities approaching half a trillion rand, a string of adverse court rulings, and deep-seated governance failures, the path to sustainability will require bold legislative reform, strong leadership, and likely significant government intervention.

For road accident victims, the most important message is this: your rights are protected by law. If you or a loved one has been injured in a road accident, it is essential to seek legal advice promptly to ensure your claim is properly lodged and processed — especially in light of the recent rulings that may reinstate previously rejected claims.

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