In the near future the current Road Accident Fund will be replaced with the Road Accident Benefit Scheme (RABS).

Here is an outline of what the new RABS will entail:

No fault basis

The major change between the current accident fund and the new scheme is that accident victims will be able to claim for benefits regardless of who caused the accident.

Pay-outs from the accident claims will be made directly to medical service providers. Beneficiaries will be entitled to the proposed benefits which will include medical and healthcare services and income benefit support which will be subject to thresholds.

With some support benefits such as Funeral Cover, up to a maximum of R10 000, will be paid.

A further change is that the RABS will only be liable for health care services available and received within South Africa and the assessment of the medical condition will be based only on medical reports compiled in the RSA.

Are you covered?

“It is vital that attention is given to the income and family support benefit,” says Karin Verster, Indwe Risk Services’ personal accident insurance specialist. “A temporary income benefit is payable for up to two years after the accident happened while the permanent income benefit is payable for two years after the accident happened which involved persons from the age of 18 years up to 60 years. This can pose a challenge for anyone older than 60 or younger than 18,” Verster continues.

“There are also no guaranteed adjustments to counter the effects of inflation. As with the income benefit, the RABS may elect to pay out a lump sum benefit instead of making regular payments. It is important that people are aware of the risks involved and plan accordingly,“ says Verster.

Reading the fine print

This is only an overview of the proposed impact of the new legislation. It is recommended that you speak to your insurance and financial advisors to get an impact assessment of your particular position should such an incident occur.

Says Verster: “Some tailored short term insurance solutions can provide very cost effective top up cover or even additional cover to complement whatever benefits are payable. Even students who have not yet completed their professional qualifications should apprise themselves of what income protection benefits are available at an affordable price”.

Concludes Peter Olyott, MD of Indwe Risk Services: “We specialise in understanding the impact of social benefit legislation and how these can affect our policy holders.

We recommend that people undertake more than just a cursory evaluation of the potential risks inherent in the new proposed legislation before making potentially life changing  decisions about insurance.”