Pretoria - The Road Accident Fund (RAF) paid out over R22 billion to crash survivors in the 2013/14 financial year, chief executive Eugene Watson said on Tuesday.
“Our cash expenditure exceeded the revenue we collected so we used our cash reserves to fund the additional needs,” he told reporters in Pretoria.
He said the RAF's revenue had increased by 13 percent to R20.6bn. A total of R18.1bn was collected in the 2012/13 year.
“We paid 7600 funeral costs. If you consider that 14,000 people die every year on our roads, half of those burials were funded in some form by the RAF,” said Watson.
“We paid 103,620 medical bills and 18,000 claims for income support. That literally means there are 18,000 people, households or families who are supported by the RAF because of a crash in the last 12 months.”
Watson said customer satisfaction had also increased in the period under review.
“Service perception increased to 64 percent from 52 percent and customer satisfaction went up to 72.8 percent from 66 percent,” he said.
The fund's staff complement also increased to 2288. Watson said numerous problems were encountered by the RAF and the crash survivors who sought assistance.
“The first challenge is the inherent adversarial fault-based compensation system. To claim from the RAF you need to show there was fault. There must be negligence, he said.
“It restricts access especially when there is a single driver (occupant) in the car.”
Not everyone injured in a car accident could be paid out by the RAF. There were also multiple legal hurdles.
“There are long settlement periods because the focus is on loss, not support. You need to prove what you lost 1/8in an accident 3/8. It is more complex to prove a claim,” said Watson.
Sometimes money paid out to crash survivors was misused.
“If you have a person who has never seen R100,000 at the same time, gets a lump sum payout for the impact of a crash on their whole life, the tendency is often to misuse the money for purposes other than rehabilitation.”
“A year or two when the money is depleted, you still have a person who is a quadriplegic, paraplegic or seriously injured and the support is gone,” said Watson.
The average loss of income claim filed with the RAF was R650,000.
“The average taxpayer earns a salary of just over R200,000. The average income in our country is approximately R43,000 per year. More sophisticated means are used to show what somebody could earn in the course of their life if they were not in the crash.”
Legal costs gobbled 21 percent of the RAF total payments.
“Consider that the 21 percent is R4.6bn, and the average RAF claim is R104,000. That R4.6bn could be used to pay 46,000 claims. It could be used to touch 46,000 lives or 46,000 homes,” said Watson.
The RAF was also struggling with financial sustainability. The fund's income, which is a fraction of the fuel levy, is affected by motorists' expenditure on fuel, not by the number of claims it receives.
“The fuel levy is not associated with the claims we get. We don't look and say 'how many claims did you get and let's adjust the fuel levy?'. The fuel levy is affected by how much one can afford when they fill up at the petrol station,” he said.
The fuel levy in the 2013/14 period was 96 cents per litre.
More than 147,000 new claims were registered and the RAF's claim entitlement base was comprehensive.
“It is not limited to South Africans. It's open to anybody injured wrongfully on our roads. If you are a pedestrian who has never filled up at a petrol station you are entitled to claim.”
“If you are a tourist who has never bought petrol directly in South Africa and you get injured you are still entitled to claim. The benefits are not defined, they are determined through a legalistic process and in some instances there is no maximum limit,” he said.
There were no ceilings for medical expense claims to the fund.
The number of people arrested for defrauding the RAF rose from 290 in the 2012/13 financial year to 478 in the 2013/14 year.
The RAF recently appointed a new general manager for forensics who had worked for the Special Investigating Unit.
Sapa