When the head of a government department tells Parliament that a state institution "would have been shut down" if it operated in the private sector, it is time for anyone with a pending claim against that institution to pay close attention.
That is precisely what happened in February 2026, when the Acting Director-General of the Department of Transport, Mathabatha Mokonyama, appeared before Parliament's Standing Committee on Public Accounts (SCOPA) and confirmed that the Road Accident Fund is, in his words, technically bankrupt. For the hundreds of thousands of road accident victims across South Africa who depend on the RAF for compensation, this declaration raises an urgent and understandable question: What does this mean for my claim?
This article answers that question. NVR Attorneys sets out what technical insolvency means in this context, what the current state of the RAF means practically for claimants, and how NVR Attorneys assists victims of motor vehicle accidents.
What Does "Technically Bankrupt" Actually Mean?
The phrase "technically bankrupt" requires some unpacking, because its legal significance differs from what many people assume.
Mokonyama told Parliament that the RAF is surviving largely on the fuel levy and that, if it were a public company, it would have been closed long ago by auditors because, technically, it is bankrupt. He noted that the only factor sustaining the fund is the guarantee provided through the fuel levy.
In practical financial terms, the RAF spends approximately R20 billion a year in claims but earns only around R4.55 billion, with growing liabilities and contingent obligations at levels that Mokonyama described as "unmanageable".
Critically, however, this does not mean the RAF will close. Deputy Transport Minister Mkhuleko Hlengwa stated that shutting down the fund is not an option, as it serves the poor. The RAF is a statutory entity established under the Road Accident Fund Act 56 of 1996. It cannot be placed in liquidation in the way a private company can. The state remains behind it, but the gap between what it owes and what it can pay continues to grow.
The Scale of the Problem
The numbers involved are striking and have direct consequences for claimants. SCOPA heard in February 2026 that the RAF had 445,782 outstanding claims in the 2024/25 financial year. Alongside this backlog, the RAF's own data shows it closed just 9.8% of all claims within the statutory 120-day investigation period in the 2024/25 financial year.
The situation has been worsened by a landmark court ruling handed down on 30 April 2026. The Supreme Court of Appeal declared the 2022 RAF 1 claim form unlawful, ruling that claimants whose submissions were declined or not acknowledged under the 2022 regime may resubmit their claims and have them treated as if they were lodged on the original date. The order gives claimants until 30 September 2026 to refile using the 2008 RAF 1 form.
The financial implications are severe. According to estimates, approximately 600,000 claims were not accepted because of the unlawful form, at an average claim value of R300,000. This creates a potential new liability of at least R180 billion. This is in addition to the RAF's existing obligations.
Court backlogs created by the RAF crisis have resulted in trial dates being scheduled as far as November 2033.
What This Means Practically for People with Active Claims
Expect delays, but the RAF cannot simply refuse to pay
The RAF's insolvency does not extinguish a claimant's right to compensation. A valid, properly lodged claim remains a legal entitlement under the Road Accident Fund Act 56 of 1996. What technical insolvency does mean is that claimants should expect payment to take longer and should prepare for a drawn-out process.
Prescription remains your biggest practical risk
With the RAF struggling to process claims within statutory timeframes, the greatest danger for individual claimants is that their claim prescribes, that is, expires, while waiting. A January 2026 High Court ruling in Cele v Road Accident Fund confirmed an important protection: where the RAF itself assumed responsibility for managing a claim and allowed the prescription period to lapse without finalising it or alerting the claimant, the court found that the RAF effectively acted as the claimant's legal representative and was under a duty to manage the claim properly. The court ruled that the RAF cannot benefit from its own delay.
The 2022 RAF 1 form ruling is time-sensitive
If your claim was rejected or not acknowledged after July 2022, when the unlawful RAF 1 form was introduced, you may be entitled to resubmit it. Prescription is waived for all claims previously rejected due to the relevant board notice. However, the deadline to refile using the 2008 RAF 1 form is 30 September 2026. This is a firm deadline that claimants must act on without delay.
The Fund may be making smaller, partial payments
Reports indicate that some firms have been receiving only a fraction of what the RAF owes their clients monthly, reflecting the severe cash constraints facing the Fund. Claimants should understand that a settlement agreement or court order does not guarantee immediate payment in full, and that enforcement of RAF obligations may require further legal steps.
Legislative uncertainty is real, but existing rights remain protected
The government is actively pursuing the Road Accident Benefit Scheme (RABS) Bill as a replacement for the current system. Mokonyama confirmed to Parliament that, as a general legal principle, legislation is not retrospective unless explicitly provided for. The practical implication is that the government would likely have to draw a line: the RABS would apply going forward, while the existing "book" of RAF Act claims would continue to be dealt with separately under the old legislation. In plain terms, claims lodged under the current RAF Act should not be extinguished by a new law.
What Claimants Should Do Right Now
Given the state of the RAF in 2026, there are clear steps that anyone with a potential or active claim should take:
- Act immediately if your claim was rejected after July 2022. The 30 September 2026 deadline to resubmit under the 2008 RAF 1 form is non-negotiable.
- Lodge your claim as soon as possible. Do not wait. Prescription periods are three years for identified driver claims and two years for hit-and-run incidents. The RAF's delays do not automatically extend these periods.
- Obtain proper legal representation. The RAF's crisis means it will scrutinise claims more carefully. Incomplete documentation, incorrect forms, or procedural errors will be used to reject or delay claims.
- Keep all documentation. Medical records, police reports, witness statements, proof of income loss, and all correspondence with the RAF must be retained and organised.
- Issue summons within five years of the accident date. Even where a claim has been lodged, prescription continues to run, and a summons must be issued to interrupt it a second time.
- Do not rely on the RAF to manage your claim for you. The Cele ruling confirmed a degree of protection where the RAF acts as a de facto representative, but this creates litigation risk and uncertainty. Independent legal representation removes this vulnerability.
Practical Implications: Why This Matters Now More Than Ever
South Africa's road accident victims have always faced a difficult claims process. In 2026, that process has become significantly more complicated. The RAF is dealing with nearly half a million outstanding claims, a finding of technical insolvency, a landmark court ruling that could add hundreds of billions to its liabilities, and mounting political pressure to replace the entire system with a no-fault scheme.
None of this removes your right to claim. But it does mean that the difference between a successful claim and a prescribed or rejected one has never been more consequential. The RAF's financial pressures create incentives to delay, scrutinise, and contest claims. Proper legal guidance from lodgement through to payment can significantly improve the outcome of a claim.
NVR Attorneys advises and represents road accident victims throughout the claims process, including claims that have been delayed, incorrectly rejected, or affected by the RAF's ongoing administrative and financial difficulties.
Conclusion
The RAF's declaration of technical insolvency is not merely a headline. It is a warning that the institution responsible for compensating road accident victims in South Africa is under extraordinary strain, and that claimants who are not proactive risk losing the compensation they are legally entitled to. The statutory right to claim remains intact, but exercising that right in the current environment requires urgency, careful documentation, and sound legal advice. If you have a pending claim or if your claim was rejected under the unlawful 2022 RAF 1 form, contact us for assistance
FAQ Section
Q1: Can the Road Accident Fund close down or be liquidated?
No. The RAF is a statutory body established under the Road Accident Fund Act 56 of 1996 and cannot be liquidated in the way a private company can. The state remains the guarantor of its obligations, funded primarily through the fuel levy. "Technically bankrupt" is a financial assessment, not a legal status that permits closure. Your right to claim remains valid.
Q2: What happens to my RAF claim if the Fund cannot pay immediately?
A valid settlement agreement or court order creates a binding legal obligation on the RAF to pay. If the RAF fails to pay timeously, enforcement mechanisms exist, including execution proceedings. Delays are common in the current environment, but a properly concluded claim does not disappear. Your attorney can advise on enforcement options where payment is unreasonably delayed.
Q3: My claim was rejected between 2022 and 2026. Can I resubmit it?
Possibly, yes. The Supreme Court of Appeal ruled on 30 April 2026 that the 2022 RAF 1 form was unlawful. Claimants whose claims were rejected or not acknowledged under that form may resubmit using the 2008 RAF 1 form by 30 September 2026. If accepted, those claims will be treated as if they were lodged on the original date, protecting them from prescription. You should obtain legal advice urgently if this applies to you.
Q4: Will the proposed RABS Bill affect my existing RAF claim?
Based on statements made to Parliament, existing RAF Act claims are expected to be dealt with separately under the current legislation, even if the Road Accident Benefit Scheme (RABS) Bill is enacted. Legislation is generally not applied retrospectively. However, this remains subject to the final terms of any legislation passed, and legal advice specific to your claim's status is recommended.
Q5: How do I protect my RAF claim from prescribing during the current crisis?
Lodge your claim within the applicable prescription period: three years for identified driver claims and two years for hit-and-run incidents. After lodging, ensure a summons is issued within five years of the accident date to interrupt prescription a second time. Do not rely on the RAF to manage your claim on your behalf. Appoint an attorney who will actively monitor and advance your claim within the correct legal timeframes.