The Road Accident Benefit Scheme (RABS) is a proposed legislation that is intended to replace the current Road Accident Fund. Under RABS, fault is not considered on the part of the persons involved in the road accident, instead the focus shifts to how the claimant is immediately assisted.
In part one of this series we discussed the impact of the proposed RABS, and in part two we illustrate how the scheme will potentially work by using three different examples.
SCENARIO 1
“Michael” is a 22-year-old, 4th year medical student at Stellenbosch University who aspires to specialise in ophthalmology. He is involved in a road accident on his way back from class and suffers a severe brain injury. It is proposed that RABS will provide Michael with the following benefits:
– Health Care Benefit (at prescribed tariff) and only in the Republic of South Africa.
– Income Benefit: As Michael is 22, he will be entitled to this benefit up to age 60. If he dies prior to reaching this age the benefit will cease.
– Income Benefit equal to the Average Annual National Income (currently approximately R43 965 per annum), as he was not employed at the time of the accident.
The fact that Michael was a medical student with a very good career path ahead will not have any effect on the Income Benefit that he would be entitled to under the proposed RABS.
SCENARIO 2
“Sophia” is a 61-year-old retired insurance broker. She still does consulting work for an insurance brokerage on a freelance basis. On her way to a yoga class she is injured in a road accident and is paralysed from the waist down. The proposed RABS will provide Sophia with the following benefits:
– Health Care Benefit (at prescribed tariff) for treatment within the Republic of South Africa.
– Income Benefit: None, as she has already reached the age of 60.
SCENARIO 3
“Simon” is a 30-year-old unemployed B Com graduate who previously worked at an accounting firm. He resigned 6 months ago to take a sabbatical, after which he was planning to obtain permanent employment in London. Simon is injured in a road accident and loses the use of both his legs. The proposed RABS will provide Simon with the following benefits:
– Health Care Benefit (at prescribed tariff) within the Republic of South Africa.
– Temporary Income Support Benefit: As Simon is 30, he will be entitled to this benefit following the 1st 60 days after the accident, if it is proven that he is unable to work for this period.
Because Simon was not earning an income at the time of the accident, the proposed RABS will assess his claim for the Income Support Benefits, based on the Average National Income (currently approximately R43 965 per annum). However, his claim for long-term income support will most probably not succeed, as he would likely be able to return to work in a wheelchair sometime after the accident.
Because the potential impact of RABS is dependent on where an individual finds themselves in their life stage (e.g. student, unemployed, retired), we urge all insurance clients to check their potential risk exposure and discuss insurance solutions that will cover the shortfalls that will be experienced under RABS.
When it comes to getting the right insurance advice, speak to your Indwe advisor on 0860 13 13 14 to make sure that you and your loved ones are properly protected.