No-fault system and annuity payments: Inside the new plan to rescue the RAF

The Department of Transport says it's still working on a revised bill to govern the Road Accident Fund (RAF) and limit payments to foreign nationals and lawyers.

Attempts to pass a similar bill in parliament in 2020 failed at the final hurdle when presented to the house.

But on Wednesday, Deputy Transport Minister Mkuleko Hlengwa told the standing committee on public accounts that while the new bill won’t be a silver bullet to all the RAF’s problems, it had to try again to limit excessive payouts.

The department has described the current state of the road accident fund as technically bankrupt and a financial risk.

Deputy Minister Mkhuleko Hlengwa says while a road accident benefit scheme bill won’t be cheap to implement, it will introduce measures to cut down on the R20 billion a year in payouts.

"What we seek to achieve with the RABS bill is the no-fault system is to curb the benefits to have a schedule of defined benefits in the act to regularise systems."

Hlengwa says the visa regime will also need to insist that foreign nationals have travel insurance, with foreign currency payments further burdening the fund.

He believes those in the country illegally should not be eligible to claim.

"We are also making a proposal to pay in annuities. Lump sum payments have proven to be problematic."

The department estimates that road accidents cost the state as much as R260 billion a year, once again sparking the debate on zero-alcohol tolerance.