RABS an affordable alternative to RAF

At a media event in Cape Town today, members of the Road Accident Fund (RAF) highlighted that the current model in unaffordable. The fund has been insolvent since 1981. However, a new system of dealing with road accidents on South Africa’s road is set to replace the RAF. The Road Accident Benefit Scheme (RABS) will operate on a no-fault basis and exclude lump sum pay-outs. In addition, there will be a limited role for attorneys under the new scheme.

The RAF explained: “The move to a no-fault scheme, where benefits are pre-defined and paid in a structured manner, ensures faster claim administration and delivery of benefits.”

What is excluded?

Furthermore, there are limits to the no-fault clause. If you are completely to blame for the accident through drunk or reckless driving you will not be eligible to receive compensation from RABS. If you have been paid out by the fund and later found to be in fault, it will be repudiated.

“RABS does not indemnify reckless and drunken drivers from criminal prosecutions. It is meant to provide a social security safety net for accident victims and their dependents, regardless of fault or criminal action. This does not mean crimes will go unpunished as other state organs will (parallel to the RABS process) investigate and prosecute offenders under the criminal justice system,” said the RAF.

The payments

With regards to payments from the scheme, they will be made directly to claimants, medical and healthcare service providers. There is also a limit to the benefits under RABS irrespective of the motor vehicle crash victim’s earnings.

According to the RAF, the capping of income support and family support benefits is necessary for RABS to be sustainable. Furthermore, this will reduce the cross-subsidisation of rich claimants by poor claimants, ensuring a fair and equal access to benefits.

“Claimants who are currently excluded from claiming loss of income from the RAF because of not being able to prove an income, will be able to claim such benefits under RABS. In such cases, it will be assumed that the beneficiary earned an income equal to the average annual national income specified in legislation*. As is the case currently under RAF, an upper income cap will apply to claims of wealthier beneficiaries, who will have to acquire top-up insurance to make up for any shortfalls above the upper income cap,” explained the RAF.

The lump sum payments from the RAF tend to be abused, the fund pointed out, with some using the settlement for frivolous things, rather than using it for medical and rehabilitation expenses. “Another advantage of RABS benefits it that they are protected from being attached by creditors or other third parties.”

*Currently R18,045 per month according to Trading Economics for the second quarter of 2016.

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