RAF Faces Bumpy Road Financially Over Fuel Levy
Article in Pretoria News 10 October 2017: By JAMES MAHLOKWANE
THE Road Accident Fund (RAF) is heading for a bumpy road after the National Treasury gave notice of strategic delays in payment of the fuel levy into its account for the last months of the year due to what it calls “cash pressures”.
The Treasury told the Pretoria News that as part of its cash management operations, there was a need to align large payments with large tax revenue inflows over the last two days of each of the months where possible.
RAF chief financial officer Rodney Gounden had initially announced the anticipated delays and apologised for inconveniences to all stakeholders, but DA member of the transport portfolio, Chris Hunsinger, rubbished the announcement, saying it was an inconvenience to people who needed the money most.
The Treasury said it made a request to the Department of Transport to schedule large payments to the last working days of September and October where possible.
It said the Department of Transport engaged with the RAF and according to the discussions, there was no objection by the RAF to the deferred transfer.
The RAF told the Pretoria News that delays in payment were due to the lack of cash available to make payment when due.
This was a result of the mismatch between the funding the RAF received via the RAF fuel levy and the payments the RAF was required to make to claims creditors in terms of the Road Accident Fund Act.
Hunsinger said a delay in payment was typical of the RAF and this was another anti-poor decision which would have a tremendous negative effect on the poor and needy. “There are a lot of caregivers who look after road accident victims, who cannot do it for themselves and who need this on a monthly basis. These people do such work with a passion.
“The last thing they need is not to get paid because the Treasury and the Department of Transport could not get their priorities right.”
Hunsinger said the RAF was paying millions in performance bonuses each year and it was an embarrassment as he saw the performance to be unsatisfactory.
“The RAF has failed to improve their compensation processes and waiting periods even after former minister of finance Nhlanhla Nene increased the fuel levy.”
The RAF, however, said performance was measured against specified performance indicators agreed to in employees’ respective annual performance contracts. It said these indicators were linked to the performance targets set out in the annual performance plan approved by Parliament, which was the criteria used to approve bonuses.
The RAF insisted it has performed exceptionally well, confirming competent financial management, internal controls, compliance and performance against predetermined objectives under difficult circumstances. It said the persistent cash constraints and huge “unfounded” liability of the RAF was further evidence that the RAF dispensation was expensive, unaffordable and unsustainable.
One person who has been waiting for a much-needed payout from the RAF is 25-year-old quadriplegic Clinton Eccles, who has no movement from his neck down after a car accident in May 2014. His family lodged a claim two months after his accident and were led to believe they would receive a payment after their final court date on May 11 this year.
His father Dave Eccles said: “My son is one of the many people who have been waiting for much-needed payment but have still not received anything from the RAF.
“His accident has affected the family financially in a very tremendous way and a payment would make things easier.”
Eccles said his son could not do anything for himself and needed two caregivers by his side 24 hours a day. He said that as a result of his condition, Clinton would be on medication for the rest of his life.
“The RAF needs to understand we and other people in our situations need this money. It is money that the victims cannot use to pay for Ferraris but to invest so that it may take care of them for the rest of their lives,” he added.
The RAF would not comment on that particular case and outstanding payment and advised that the claimant contact their offices for further information regarding their expected payment.