If you are an entrepreneur or own a business, you can claim from the Road Accident Fund (RAF) for loss of earnings resulting from your injuries sustained in a road accident. There are conditions as with anything in life, however, if you have been unable to work due to your injuries the good news is that you have the legal right to claim from the RAF.
Let’s start with the basics…
Claiming for loss of earnings from the RAF
Determining fault in an accident when claiming from the RAF
Proving loss of earnings in a claim from the RAF
Medical expenses claim from the RAF
Evidence of actual earnings to accompany the RAF claim form
Ways to prove loss of earnings as an entrepreneur
Calculating loss of earnings for an RAF claim
Hiring an RAF attorney
Step-by-step guide on how to claim from the RAF
What is loss of earnings?
Basically, loss of earnings is the income you lost, or will lose in the future, due to injuries you suffered during a road accident. As long as you were not 100% to blame for the accident, you are entitled to claim for the money you would have earned during that period.
Note: the RAF capped the amount claimable per year at R160,000 as of 31 October 2018.
While salaried employees can easily prove the loss of income because they can produce a pay slip, many entrepreneurs do not have a formal pay slip and proving earnings can be complicated.
What else can you claim for?
The RAF will also pay compensation for any past and future medical expenses and currently you can claim for general damages for pain, suffering and disfigurement for serious injuries. In the future, general damages will change depending on the implementation of the new Road Accident Benefit Scheme bill.
When can you not claim for loss of earnings?
If you are a driver and/or the owner of the vehicle and you were 100% responsible for the accident you are not entitled to make any claim to the RAF. You can also not claim if you were the only person involved in the accident and nothing else contributed to the accident.
What if you were partly responsible for the accident?
What the RAF does is reduce your claim by the percentage amount that you were responsible for the accident. Let’s say you are as responsible as the other party and the RAF decides that you were 50% to blame, then in this case the RAF would only pay out 50% of your past or future loss of earnings.
What do you need to prove?
When preparing your claim, the evidence is absolutely critical to the success or rejection of your claim. You will need to provide the RAF with enough evidence to support your claim for loss of earnings.
Proving the injury resulted in loss of earnings
You will need to prove that your injuries were actually caused by the accident which therefore resulted in you not being able to work, which therefore resulted in loss of earnings. In legal terms they call it causality, but in layman’s terms it means that if you were off work directly due to the injury from the accident, you can claim. However, if your time off work was not due to the injuries sustained in the accident, your claim will be rejected. The RAF and the law are very specific about this.
ACCIDENT = INJURY = UNABLE TO WORK = LOSS OF INCOME
Medical expenses claim
Claiming for loss of earnings always coincides with a claim for medical expenses. If you were not physically injured, you cannot claim for loss of earnings from the RAF. Your medical records and reports will need to support your loss of earnings claim by:
- Demonstrating that you could not work for a set period in the past
- Demonstrating that you will be unable to work for a period of time in the future
This area of personal injury law can get complicated, especially if you are trying to do this on your own. Later in this article we explain the benefits of instituting a claim through an expert RAF attorney should you decide to proceed with a claim against the RAF.
Evidence of actual earnings
In South Africa there are around 5.6 million SMMEs comprised of 3.3 million survivalist businesses, 1.7 million micro-enterprises and 554,000 small enterprises. Because many entrepreneurs fall into the category above the process of proving earnings is more complex because most do not have formal pay slips.
If your claim is to succeed you will need to show that the profitability of your business was, or is, negatively affected because you were, or are, unable to work. To do you must have proof to back up your claim.
You will most likely have a bookkeeper so all you need to do is submit your profit and loss accounts for three years prior to the accident occurring.
If you are a startup you won’t have enough historical financial documents to supply to the RAF and you will need to provide other records such as a personal tax return.
Informal businesses without a bank account
If you operate without bank accounts or verifiable tax and business records, it is very difficult to provide enough evidence in a claim against the RAF for loss of earnings.
Here are some ways to prove loss of earnings
- Bank statements
- Financial statements prepared by a professional bookkeeper or accountant
- Copies of any personal tax returns
- Invoices sent to customers
- Receipts for money paid to you
- Copies of sales and orders
- Printouts from sales tills
- Details of past contracts with customers
- Details of any future contracts with customers
How do you calculate a loss of earnings payout?
Calculating loss of earnings and what you should get from the RAF is not a simple process. That is why many people use a top RAF attorney who has the expertise and knowledge to get the best payout for you. However, if you can prove your monthly income this is how you can figure out what the RAF would most likely pay you:
Multiply your average income (after taxes) by the period you were off work.
Multiply your monthly average income (after taxes) by the period of absence, plus inflation adjustment. For each year you are claiming for you must adjust the figure to the inflation rate figure. For example, using simple earnings of R1,000 per month and you are claiming for 2018 and 2019 you would add on 4.8% for 2019 (this is the number the SA Reserve Bank has forecast for 2019).
The calculation would look like this…
Step 1: Calculate 2018
R1000.00 x 12 = R12 000.00
Step 2: Calculate 2019
R1000.00 x 12 = R12 000.00 x 4.8% = R576
R12 000.00 + R576 = R12 576.00
Step 3: Calculate total loss of earnings payout
Total Step 1 + Total step two
R12 000.00 + R12 576 = R24 576.00
Likewise, if you are only claiming for 6 months where you were unable to work and 3 of these fell into 2018 and 3 into 2019, the calculation would be:
Step 1: Calculate 2018
R1000.00 x 3 = R3000.00
Step 2: Calculate 2019
R1000.00 x 3 = R3 000.00 x 4.8% = R144.00
R3 000.00 + R144 = R3144.00
Step 3: Calculate total loss of earnings payout
Total Step 1 + Total step two
R3000 + R3144.00 = R6144.00
Time period for RAF claims
According to the RAF you need to submit a claim within 3 years of the accident if you know who the driver is who was responsible for the accident and within 2 years if you do not know who the driver was. This gives the RAF time to trace the driver if at all possible. If you do use an attorney, they will normally trace the driver on your behalf.
Do you need to hire an RAF attorney?
You do not have to hire an attorney to make a claim, the RAF gives assistance to all people making a claim. However, using a specialised RAF attorney does have its benefits. These include:
- Having your claim prioritised by the RAF
- Ensuring your claim is made on time
- Getting the best compensation for you
- Taking care of all the administrative headaches
Another benefit is that most professional RAF attorneys will work on a contingency basis which means they only get paid when you get a payout.
Step-by-step process for making a claim with the RAF
Step 1 – Make sure you have all the evidence and documents
You will need to submit a variety of documents with your claim forms to the RAF. If your evidence and documents are weak, your claim will be weak. You want to make sure that you have all the right supportive documents to get the best possible outcome from the RAF.
These documents include
- The police report of the accident
- Medical invoices and reports of your injuries
- Medical report by an expert proving you were or are unable to work
- Proof of earnings
- The official RAF forms
Step 2 – Fill out the forms
You must accurately and legibly fill out all the official RAF forms. The last thing you want is to have your claim get assessed by the RAF only to have it delayed, or worst case rejected, because you did not fill out the forms correctly or left out pertinent information.
- Download the Claim form from the RAF website
- Print it
- Complete it accurately
- Check it for any errors
- Sign it
Claim forms to complete
- RAF 3 – Accident Report Form. If you were a driver of the vehicle involved in the accident you must give details of the accident to the RAF, this form should be filled out within 14 days of the accident.
- RAF 1 – Claim for compensation and Medical Report
This is the claim for medical expenses, past and future as well as for loss of earnings. This form provides basic information on your claim, the motor vehicles involved, details of parties involved in the accident, the date and place of the accident and the amounts claimed. It also contains a medical report to be filled in by the treating doctor.
- The evidence for medical expenses, loss of income or loss of support (past and future) should be presented as an affidavit and submitted with the form, as well as all medical records, invoices and statements.
Notification of Dispute
If your claim is rejected, you can dispute it by filling out this form and notifying the RAF. If you decide at this point to use an attorney, they can do it on your behalf. It is not recommended to use an attorney only at the stage of dispute, if you are going to get an RAF attorney you should do so from the very beginning. This is because you could have unknowingly filled in the form or provided evidence that will count against you in a court of law. Remember, the attorney wants to get you a payout, so he or she can get paid. No payout equals no fees for the attorney.
Step 3 – Hand in your claim to the RAF
You can hand in the forms and documents at the closest RAF office or you can send it via registered post. It would be better for you to physically hand in your document and get a receipt of delivery, but either way is an official record accepted by law.
As you know administrative errors do occur, so make sure to make a copy of all the paperwork and keep them in a safe place.
Step 4 – Processing and RAF investigation
Your claim will be registered on the RAF claim system and then it will be investigated. The RAF follows this process:
Validation of the claim
The person assigned your claim will assess whether your claim meets the requirements of the RAF and will check that you have given all the requested information. This is the procedural part of the process, if you left out a part of the form, or forgot to put in the accident case number, or didn’t have a medical professional fill out the relevant section, this person will ask for more information or reject your claim. At this stage the RAF may have to trace the other driver or any witnesses to the accident so if you do not know the details of the other driver, the process will be delayed.
Who is at fault?
At this stage your claim will be assessed, and fault will be determined. The RAF assessor will examine the evidence and decide who is to blame, yourself or the other driver.
Once blame has been assigned, the assessor will look at all the evidence and determine whether to pay or reject the claim.
RAF determines the payout
At this stage the RAF will determine the amount of the losses you suffered – medical expenses as well as loss of income based on the evidence you submitted with the claim. They will also do an investigation with their own experts, such as actuaries or medical specialists, who can provide further evidence before making a final decision on compensation.
Step 5 – The RAF makes an offer
At this stage the RAF will make an offer in writing to yourself or your attorney. Should you accept the offer you will be issued a form which will have all the details of the agreed amounts for you to sign. You can negotiate with the RAF; however, it is best to do this with an attorney to ensure you get the best outcome. If agreement is not reached with the RAF you can of course choose to go to court. However, you need to be aware that this will take time.
Step 6 – The RAF makes payment
Once you have accepted the offer made by the RAF, the fund says that payment will be made in 180 days, but current RAF claim payments are backlogged due to cash flow issues, so you may have to wait some time.