The Road Accident Fund is currently has a funding shortfall of R98 billion. To remedy the situation, Minister of Finance, Nhlanhla Nene mentioned in his budget speech that he will be adding 50c a litre to the road accident fund fuel levy. The Road Accident Fund compensates people who are injured or lost their lives as a result of road accidents.
According to the CEO of Road Accident Fund, Dr. Eugene Watson, the fund currently raises R21-billion a year from the levy; the 50c increase will raise the annual revenue to R31-billion.
The additional 50ᶜ is going to be a great relief
Dr Watson added that for the past three decades the Road Accident Fund has been technically insolvent because they provided for claims which they did not have money to pay for. For the past two years they’ve been working on the transformation process which worked out very well. The fund has clean audit and is more productive as a result of the transformation. In the last 10 months they’ve been avoiding to prepare claims until they have money on hand to provide for the claims. With this strategy people do not have to wait longer for payments.
The finance Minister’s fuel levy increase will come into effect from April 1.