road accident benefit scheme

At the end of October 2019, the proposed Road Accident Benefit Scheme (RABS) Bill was revived for consideration in Parliament.

This controversial Bill continues to draw criticism, and for good reason. It may significantly compromise the rights of road accident victims.

Experts also continue to raise concerns that RABS is not financially feasible. Here we consider what RABS could cost South Africans if it goes ahead as a replacement for the Road Accident Fund (RAF).

Is RABS financially unsustainable?

The proposed RABS Bill seeks to introduce a “no-fault” system for determining compensation for road accident victims.

This is one of the most criticised aspects of RABS. Essentially, it rewards drunk and reckless drivers – making them eligible for the same benefits as innocent accident victims.

This would result in a significant increase in claimants.

According to the Association for the Protection of Road Accident Victims (APRAV), this increase could cause loss-of-support claims to rise from R3 billion to an estimated R21.6 billion per year. That’s without considering other claim types.

The RAF is already struggling financially, with a net deficit for the 2017/2018 year of R206.5 million.

The estimated increase in loss-of support claims alone could rapidly lead to a deficit as high as R225 billion.

RABS and the likely increase in fuel costs

Currently, RAF is funded primarily through a fuel levy. Every time a South African buys fuel, this tax is added to the bill. If it were adopted, RABS would also depend primarily on the fuel levy for funding.

Professor Hennie Klopper, who heads the APRAV Solutions Team, predicts that RABS would necessitate an increase in the fuel levy of at least R1 per litre.

For South Africans already faced with tough economic pressures, this will be a heavy blow.

RABS and administration costs

The claim that the RABS no-fault system would simplify the claims process by eliminating red tape is being questioned.

A massive increase in claim volumes will require a corresponding increase in administration. Even if the needed capacity is found, this will escalate administration costs. However, no estimates for these costs have been provided.

How RABS will directly affect taxpayers

Apart from a significant increase in the price of fuel, taxpayers will have to support two systems simultaneously  while the transition from RAF to RABS is facilitated.

No-one can be sure how long this process would take.

The longer the bill stagnates in parliament, the more its implementation will ultimately cost the country.

Opposition parties that voted against the Bill have called it unaffordable and unethical. When the Bill was put to the vote in late 2018, they staged a mass walkout in protest.

APRAV has noted that nonetheless, the Bill is being aggressively pushed forward by the Department of Transport with “no adequate research, planning, consultation or consideration of the complicated realities of South Africa”.

Other key differences between RAF and the proposed RABS

The existing RAF compensates victims of road accidents through lump sum payments. In contrast, RABS proposes to pay victims small monthly benefits for a fixed period.

It will dramatically reduce the financial compensation available to road accident victims.

In addition, the RABS Bill proposes:

  • automatically cutting off benefits for victims once they turn 60
  • completely cutting off benefits when victims return to work, regardless of loss of earning potential
  • excluding students from compensation for loss of future earning potential (regardless of how seriously injuries affect their future ability to work)
  • offering compensation only to South African citizens.

How DSC Attorneys is fighting the proposed RABS Bill

At DSC Attorneys, we remain committed to protecting the rights of South African road accident victims and their families.

We believe that if it goes ahead, RABS could cost the South African public and compromise the rights of all those injured on our roads.

We’ve been closely involved in parliamentary debate surrounding RABS and continue to monitor developments. We have also partnered with APRAV to fight adoption of the RABS Bill.

Find out more about the proposed Bill here.

If you or a family member has been injured in a road accident, we can also assist with a road accident claim, on a no win, no fee basis. Contact us for the very best legal support and representation.

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