The RAF says that the amount of money that streams in from the fuel levy simply isn't enough to pay all the claims. File picture: Netcare911.

Cape Town - The Road Accident Fund (RAF), which has been beset by financial challenges over the years, continues to be hampered by money shortages, the organisation said on Tuesday.

Despite an increase in the fuel levy, mandated by the Minister of Finance in February, the RAF, as of September was liable for an amount of R130 billion and in November it owed 5941 claimants and service providers R10.79 billion. The fuel levy enabled the RAF to settle claims to the tune of R3.4 billion in October.

“The 154c per (litre) derived from the RAF fuel levy which equates to around R3 billion per month remains inadequate when compared to the value of claims settled each month,” revealed RAF CEO Dr Eugene Watson. There was a backlog of open claims, which Watson said, was decreasing as the organisation's performance continued to improve. Performance he said, was however “dependent on available fuel levy income.”

ROOM FOR IMPROVEMENT

Watson said that the amount that streams in from the fuel levy simply isn't enough to pay all the settled claims, and the backlog in payments is the outcome. He conceded that there was room for improvement when it came to the RAF's performance. He proudly noted that the RAF has for the past three consecutive years, received clean audits, which is “an indication of its responsible management of public funds.”

The RAF was also able to pay service providers as Watson noted that service providers had to be prioritised, even within the payment queue. He noted that more than 30 000 monthly payments were made to service providers, and these payments have doubled over the last three years.

“Despite all the difficulties, the organisation has received recognition for improving service delivery and honouring its core mandate by winning a number of public sector and transport industry awards,” Watson said. He noted that while operational costs were less than 5% of the entire budget, the bulk of funds goes toward settling claims, and this ability to pay claims improved by 26% during the 2015-2015 financial year.

The RAF does however, still have to fulfill requirements within the RAF Act and Public Finance Management Act. “The attachment and removal of assets paralyzes the institution as the RAF does not have sufficient assets or funding to meet all immediate obligations,” warned Watson.

HOPE ON THE HORIZON

Watson said the RAF's current compensation scheme “has not been a solvent arrangement for over 30 years” and the proposed Road Administration Benefit Scheme (RABS) would make the organisation more sustainable and speed up its claims finalisation and ease high administrative costs.

As the RAF seeks to find ways to meet all requirements, it appealed to all claimants and service providers to be patient as they endeavored to honour their financial obligations and look at more efficient payment systems.

One aspect of the proposed RABS, Watson added, was that “fault will not be considered on the part of the claimant or other persons involved in the road accident. The focus will essentially be on how the injured road crash victim is immediately assisted, and payments will be made directly to claimants, medical and healthcare service providers.

Importantly, support will be rendered within the confines of what is affordable.” With the festive season fast approaching, Watson urged all road users to drive safely and “take extreme care on the road to ensure high motor vehicle accident stats do not once again become the leading news.”

The RAF would be closed from December 24 - January 3.

African News Agency (ANA)