How Much Does the Road Accident Fund Pay for Loss of Income?

The Road Accident Fund (RAF) in South Africa provides compensation to individuals who suffer injuries in motor vehicle accidents. One of the key types of compensation offered by the RAF is for loss of income, which applies to individuals who are unable to work due to their injuries. If an accident impacts your ability to earn a living—either temporarily or permanently—you may be entitled to financial relief from the RAF.

What is Loss of Income Compensation with the RAF?

Loss of income compensation is a benefit provided by the RAF to individuals whose ability to work has been affected by a road accident. This compensation covers past and future income loss, helping victims maintain financial stability while recovering from their injuries.

The RAF compensates claimants based on the following:

  • Past Loss of Earnings: Income lost between the date of the accident and the settlement of the claim.
  • Future Loss of Earnings: Estimated income loss if the injury results in long-term or permanent disability.

If an accident permanently affects your earning capacity, the RAF provides compensation based on how much you would have earned had the accident not occurred. However, it is important to note that the RAF does not cover 100% of the lost income.

How Much Does the RAF Pay for Loss of Income?

The RAF calculates loss of income based on the victim’s salary before the accident and the extent of their disability. However, the amount payable is capped according to South African law.

As of recent RAF regulations:

  • The maximum payout for loss of earnings is capped at approximately R340,000 per year (this cap is adjusted periodically for inflation).
  • The RAF only covers 70% of the actual loss of income, meaning that claimants will not receive their full salary amount as compensation.

For example:

  • If you earned R500,000 per year before the accident, the RAF will only consider the maximum cap of R340,000 per year.
  • The RAF will then compensate 70% of R340,000, which equals R238,000 per year.

This cap applies regardless of how much you were earning before the accident. If you were earning less than the capped amount, your compensation will be based on your actual salary rather than the maximum limit.

Factors That Affect RAF Loss of Income Compensation

Several factors influence how much the RAF will pay for loss of income:

  1. Pre-Accident Salary
    • The RAF calculates loss of earnings based on how much you earned before the accident.
    • If you were self-employed, you may need to provide financial records to prove your income.
  2. Severity of the Injury
    • The extent of the injury and how it affects your ability to work plays a major role.
    • If you can return to work in some capacity, the RAF may only compensate for partial loss of earnings.
  3. Age and Remaining Working Years
    • If the accident permanently prevents you from working, the RAF considers how many years you would have worked before retirement.
    • Younger victims may receive higher compensation for future loss of income than those nearing retirement.
  4. Occupation and Skills
    • The RAF assesses whether you can still perform light or alternative duties in your field.
    • If the injury forces you into a lower-paying job, the RAF compensates for the difference in earnings.
  5. Medical Evidence
    • A medical report must confirm that your injury prevents you from working.
    • The RAF may also require an occupational therapist’s report to determine your work limitations.

How to Claim Loss of Income Compensation from the RAF in South Africa

To successfully claim loss of income compensation from the RAF, follow these steps:

Step 1: Report the Accident

  • Ensure that the accident is reported to the police and obtain an accident report.
  • Gather witness statements and any additional supporting evidence.

Step 2: Seek Medical Attention

  • Your injuries must be documented by a medical professional.
  • Obtain medical reports, X-rays, and a disability assessment.

Step 3: Gather Proof of Income

  • Submit payslips, tax returns, employment contracts, or business financial statements.
  • If self-employed, provide financial records and proof of income before the accident.

Step 4: Submit the Claim

  • A personal injury attorney can assist in preparing and submitting the claim to the RAF.
  • The claim must include medical records, proof of income, and accident details.

Step 5: Wait for Claim Processing

  • RAF claims take several months to years to be finalized.
  • A legal expert can help speed up the process and maximize your payout.

Example Payout Scenarios for LOss of Income

Here are some examples of RAF loss of income compensation calculations:

Example 1: Temporary Loss of Income

  • A teacher earning R300,000 per year is injured in a car accident and unable to work for 6 months.
  • The RAF compensates 70% of lost earnings:
    • R300,000 ÷ 2 (6 months) = R150,000
    • 70% of R150,000 = R105,000 payout

Example 2: Permanent Disability with Capped Earnings

  • A construction worker earning R600,000 per year becomes permanently disabled.
  • Since this amount exceeds the RAF cap of R340,000 per year, the compensation is based on the capped amount.
  • 70% of R340,000 = R238,000 per year until retirement.

Why Do You Need a Lawyer for RAF Loss of Income Claims?

While it is possible to submit an RAF claim on your own, the process can be complex. A personal injury lawyer can help:

  • Ensure you receive the maximum compensation by properly calculating lost earnings.
  • Gather the necessary medical and financial documentation to support your claim.
  • Negotiate with the RAF if they dispute the claim amount.

At PM Attorneys, we specialise in RAF claims and will ensure that you receive the compensation you deserve.

If you have been injured in a road accident and are unable to work, contact PM Attorneys today for expert legal assistance. We will handle your RAF claim efficiently and ensure that you receive the maximum compensation available.

Contact PM Attorneys Now for a consultation!