1. General Damages  Common Law Recognition  Sense of Justice  A Real Loss  Reconciliation and Solace  Financing Lifestyle Changes  Absence of Other Assistance & Support  Common Law Recognition  Sense of Justice  A Real Loss  Reconciliation and Solace  Financing Lifestyle Changes  Absence of Other Assistance & Support  No Medium of Exchange  Uncertainty  Inconsistency  Unequal Treatment  Incentives to Maximize Damage  Lifestyle Changes  Drain on Resources  Small Claims  Transaction Costs Chapter 36

2. Object of Road Accident Benefits Scheme restoration of a life with dignity and solace for suffering to road accident victims who have sustained serious injuries with life changing consequences The Road Accident Benefits Scheme should provide timeous, appropriate and effective healtchare and rehabilitative intervention, protection against impoverishment, or for the families of deceased road accident victims

3. Benefits Healthcare: chapters 26–30 pp.XXIV, 789- 994 Loss of earning capacity: chapters 31&32 pp.XXV, 995- 1058 Funeral benefits: chapter 33 pp.XXVII, 1059- 1064 Family support benefits: chapters 34 pp.XXVII, 1065- 1101 Non-economic loss benefits: chapters 35&36 pp.XXVIII, 1103- 1182 Healthcare: chapters 26–30 pp.XXIV, 789- 994 Loss of earning capacity: chapters 31&32 pp.XXV, 995- 1058 Funeral benefits: chapter 33 pp.XXVII, 1059- 1064 Family support benefits: chapters 34 pp.XXVII, 1065- 1101 Non-economic loss benefits: chapters 35&36 pp.XXVIII, 1103- 1182

4. Cost Drivers pp.1340 - 1362  Reviewable periodic payments  Abolition of foreign currency payments  Healthcare tariffs  Managed healthcare  Direct payment to suppliers  Reviewable periodic payments  Abolition of foreign currency payments  Healthcare tariffs  Managed healthcare  Direct payment to suppliers Reduction in costs

5. Cost Drivers  Waiting periods  Benefits limited to declared income  Monetary ceilings  Limitation on dependants  Time limit  Impairment thresholds  Waiting periods  Benefits limited to declared income  Monetary ceilings  Limitation on dependants  Time limit  Impairment thresholds Reduction in costs pp.LVII – LX, XXVI, 1308 - 1319

6. Cost Drivers  No-fault participation  Payment to public sector  Flat rate funeral and family adjustment benefits  Benefits to non-earners  Removal of ceilings on passengers  No-fault participation  Payment to public sector  Flat rate funeral and family adjustment benefits  Benefits to non-earners  Removal of ceilings on passengers Increase in costs pp.LVII – LX, XXVI, 1308 - 1319

7. Systemic Approach vs Piecemeal Fiddling  Context (SA, data & research, international)  Policy and strategy (National planning. Constitution)  Coordination of policy, benefits and delivery (Departments of Finance, Minerals & Energy, Transport, Health, Social Development; Parliament)  Context (SA, data & research, international)  Policy and strategy (National planning. Constitution)  Coordination of policy, benefits and delivery (Departments of Finance, Minerals & Energy, Transport, Health, Social Development; Parliament)

8. Ad hoc example (1)  Object: Save money  Proposal: Introduce periodic payments  Result:  Insurance vs social security?  Delay healthcare & rehabilitation because fault  Delay pension because fault  Retain legalistic approach  Retain transaction costs  Increase delivery costs & incapacity  Object: Save money  Proposal: Introduce periodic payments  Result:  Insurance vs social security?  Delay healthcare & rehabilitation because fault  Delay pension because fault  Retain legalistic approach  Retain transaction costs  Increase delivery costs & incapacity

9. Ad hoc example (2)  Object: Save money  Proposal: Remove or limit compensation  Result:  Insurance or social security?  Common law right to sue for balance of damages?  No exchange – limit compensation for automatic entitlement  Retain delays & transaction costs  Retain misallocation of compensation  Duplication & inappropriate personnel  Object: Save money  Proposal: Remove or limit compensation  Result:  Insurance or social security?  Common law right to sue for balance of damages?  No exchange – limit compensation for automatic entitlement  Retain delays & transaction costs  Retain misallocation of compensation  Duplication & inappropriate personnel

10. Recommendations re Benefits  Road Accident Benefits Scheme pp.LVIII, 1308 – 1317  Funded by  fuel levy;  surcharges on road use fines;  surcharges on registration of certain vehicles.  Pay-as-you-go scheme pp.XXXVI-XL, 181-276  Integration within system of comprehensive social protection pp.XXXVIII-XL, 373-427  Road Accident Benefits Scheme pp.LVIII, 1308 – 1317  Funded by  fuel levy;  surcharges on road use fines;  surcharges on registration of certain vehicles.  Pay-as-you-go scheme pp.XXXVI-XL, 181-276  Integration within system of comprehensive social protection pp.XXXVIII-XL, 373-427

11. 4.Safety-net only with limitations on benefits.  Thresholds – waiting periods for income support benefits, severity assessment of impairment for life enhancement benefits.  Ceilings – caps on income and family support, maximum on life enhancement benefits.  Prescribed benefits – tariffs on healthcare, schedule for life enhancement benefits, flat rate funeral benefits. pp.XL, 428-467 5.Victim retains common law right to sue for damages from wrongdoer if not satisfied with State provided road accident benefits pp.XLI, 468-503 4.Safety-net only with limitations on benefits.  Thresholds – waiting periods for income support benefits, severity assessment of impairment for life enhancement benefits.  Ceilings – caps on income and family support, maximum on life enhancement benefits.  Prescribed benefits – tariffs on healthcare, schedule for life enhancement benefits, flat rate funeral benefits. pp.XL, 428-467 5.Victim retains common law right to sue for damages from wrongdoer if not satisfied with State provided road accident benefits pp.XLI, 468-503

12. 6.Fault plays no part – benefits available to all road accident victims pp.XLII, 514-564 7.Lump sum awards reduced.  Healthcare, rehabilitation and lifecare fees paid to supplier at time of provision of goods and services.  Income and family support made by periodic payment.  Funeral benefits and family adjustment benefits paid by flat rate lump sum.  Life enhancement benefits paid in lump sum according to schedule pp.XLII, 587-664 6.Fault plays no part – benefits available to all road accident victims pp.XLII, 514-564 7.Lump sum awards reduced.  Healthcare, rehabilitation and lifecare fees paid to supplier at time of provision of goods and services.  Income and family support made by periodic payment.  Funeral benefits and family adjustment benefits paid by flat rate lump sum.  Life enhancement benefits paid in lump sum according to schedule pp.XLII, 587-664

13. 8.Healthcare = hospitals, medical, pharmaceutical, therapeutic, prosthetic, appliances and lifecare.  To provincial and private suppliers.  Tariff.  No waiting period.  Paid to suppliers pp.XLV-LI, 789-994 8.Healthcare = hospitals, medical, pharmaceutical, therapeutic, prosthetic, appliances and lifecare.  To provincial and private suppliers.  Tariff.  No waiting period.  Paid to suppliers pp.XLV-LI, 789-994

14. 9.Income support pp.LI-LIV, 995- 1058 Paid to earners for temporary and permanent loss of earning capacity.  Paid to non-earners only for permanent loss of earning capacity (12/18 months).  International Classification of Functioning (ICF) - assessment of disablement  Waiting periods - basic conditions of Employment Act plus 7/20 working days.  Earners benefits = 80% of net pre-accident income to maximum amount (highest marginal tax rate on R8000).  Non-earners benefits = 80% of tax threshold 9.Income support pp.LI-LIV, 995- 1058 Paid to earners for temporary and permanent loss of earning capacity.  Paid to non-earners only for permanent loss of earning capacity (12/18 months).  International Classification of Functioning (ICF) - assessment of disablement  Waiting periods - basic conditions of Employment Act plus 7/20 working days.  Earners benefits = 80% of net pre-accident income to maximum amount (highest marginal tax rate on R8000).  Non-earners benefits = 80% of tax threshold

15. 10.Funeral benefits = flat rate lump sum (R15 000) pp.LIV, 1059- 1064 11.Family adjustment benefits = flat rate lump sum (R10 000/R15 000) pp.LVI, 1065- 1101 10.Funeral benefits = flat rate lump sum (R15 000) pp.LIV, 1059- 1064 11.Family adjustment benefits = flat rate lump sum (R10 000/R15 000) pp.LVI, 1065- 1101

16. 12.Family support benefits available to children and spouses/partners.  Children until eighteen years or twenty-three years.  Surviving spouses periods from three years to five years.  Benefits = one half for surviving spouses and children and to share in one half of deceased’s spouses income support benefits.  Payable as pension. pp.LIV-LVI, 1065-1101 12.Family support benefits available to children and spouses/partners.  Children until eighteen years or twenty-three years.  Surviving spouses periods from three years to five years.  Benefits = one half for surviving spouses and children and to share in one half of deceased’s spouses income support benefits.  Payable as pension. pp.LIV-LVI, 1065-1101

17. 13.Life enhancement benefits  Calculated according to impairment determined by AMA Guides.  Eligible if assessed 30% or more Whole Person Impairment.  Amounts of benefits = percentage of maximum amount payable = R500,000.  Paid in lump sum. pp.LVII, 1103-1182 13.Life enhancement benefits  Calculated according to impairment determined by AMA Guides.  Eligible if assessed 30% or more Whole Person Impairment.  Amounts of benefits = percentage of maximum amount payable = R500,000.  Paid in lump sum. pp.LVII, 1103-1182

18. Delivery RAF: chapters 37 – 39 pp.XXIX, 1183- 1284 Implementation: chapters 40 – 42 pp.XXX, 1285- 1363 RAF: chapters 37 – 39 pp.XXIX, 1183- 1284 Implementation: chapters 40 – 42 pp.XXX, 1285- 1363

19. Recommendations re Delivery  Road Accident Benefits Scheme (RABS) to administer proposed scheme pp.LVIII, 1308-1317  RAF to wind down with ringfencing of current obligations pp.LVIII - LIX, 1317- 1318  RABS  Subject to oversight of Ministry (Social Development / Transport) and Board  Executive competency (managerial and financial experience in private sector)  Administrative competencies (healthcare and pension administration) pp.LVIII, 1304-1308  Road Accident Benefits Scheme (RABS) to administer proposed scheme pp.LVIII, 1308-1317  RAF to wind down with ringfencing of current obligations pp.LVIII - LIX, 1317- 1318  RABS  Subject to oversight of Ministry (Social Development / Transport) and Board  Executive competency (managerial and financial experience in private sector)  Administrative competencies (healthcare and pension administration) pp.LVIII, 1304-1308

20. Oversight of the RAF  Minister  Financial Services Board  Auditor-General  Board  Minister  Financial Services Board  Auditor-General  Board

21. Minister (pp.1304 - 1307)  Change of Ministry?  Provision of social security benefits  Core competency Minister (pp.1304 - 1307)  Change of Ministry?  Provision of social security benefits  Core competency

22. Financial Services Board (pp.1195 - 1196)  Advice and financial supervision of FSB should not apply Financial Services Board (pp.1195 - 1196)  Advice and financial supervision of FSB should not apply

23. Auditor-General (pp.1196-1198)  Limitation of audit  120/50 000 claims files checked Auditor-General (pp.1196-1198)  Limitation of audit  120/50 000 claims files checked

24. Board (pp.1183-1195, 1198-1206, 1206-1209,1209- 1215)  Absence of managerial and financial expertise  Sectional interests and conflicts of interests  Lack of political independence  Failure to give proper accounting Board (pp.1183-1195, 1198-1206, 1206-1209,1209- 1215)  Absence of managerial and financial expertise  Sectional interests and conflicts of interests  Lack of political independence  Failure to give proper accounting

25. Management of RAF  Context  Expertise  Employment costs  Capacity  Consultants  Severance packages  Context  Expertise  Employment costs  Capacity  Consultants  Severance packages

26. Context (pp.1219-1229)  Monopoly  No evaluation of service delivery  No bottom line  Organisation in transition Context (pp.1219-1229)  Monopoly  No evaluation of service delivery  No bottom line  Organisation in transition

27. Expertise (pp.1229-1239)  Absence management and financial experience  Absence healthcare skills  Absence administrative and clerical competencies  Oversupply legal qualifications (44% total employees / 86% claims staff) Expertise (pp.1229-1239)  Absence management and financial experience  Absence healthcare skills  Absence administrative and clerical competencies  Oversupply legal qualifications (44% total employees / 86% claims staff)

28. Employment Costs (pp.1239-1247)  CEO package: R990,000 p.a. / R82,500 p.m.  Managers: R350,000 – R544,000 p.a. / R44,672 p.m.  Tea lady: R4,150 p.m.  Employee in private sector earning R9,000 enters RAF with R44,000 Employment Costs (pp.1239-1247)  CEO package: R990,000 p.a. / R82,500 p.m.  Managers: R350,000 – R544,000 p.a. / R44,672 p.m.  Tea lady: R4,150 p.m.  Employee in private sector earning R9,000 enters RAF with R44,000

29. Capacity  Forensic audit report pp.1228-1229, 1262-1263  Consultants pp.1265-1269  Litigation management pp.144-148, 738- 753  Absence of data pp.16, 23, 175-176, 1198-1206 Capacity  Forensic audit report pp.1228-1229, 1262-1263  Consultants pp.1265-1269  Litigation management pp.144-148, 738- 753  Absence of data pp.16, 23, 175-176, 1198-1206

30. Consultants (pp.1262-1274)  Circa: R20m p.a.  R218,400 for photocopying and collation of material  R340,000 including preparation of PowerPoint templates Consultants (pp.1262-1274)  Circa: R20m p.a.  R218,400 for photocopying and collation of material  R340,000 including preparation of PowerPoint templates

31. Severance Packages (pp.1244-1246, 1275- 1279, 1283)  24 months salary across the board  Van Oudtshoorn package = R2.2 million for 5 years employment (166 years)  Mabunda package = R1.2 million for 23 months employment (118 years) Severance Packages (pp.1244-1246, 1275- 1279, 1283)  24 months salary across the board  Van Oudtshoorn package = R2.2 million for 5 years employment (166 years)  Mabunda package = R1.2 million for 23 months employment (118 years)

32. Recommendations re Delivery  Road Accident Benefits Scheme (RABS) to administer proposed scheme pp.LVIII, 1308-1317  RAF to wind down with ringfencing of current obligations pp.LVIII - LIX, 1317- 1318  RABS subject to oversight of Ministry (social development / transport) and Board. Executive competency (managerial and financial experience in private sector) and administrative competencies (healthcare and pension administration) pp.LVIII, 1304-1308  Road Accident Benefits Scheme (RABS) to administer proposed scheme pp.LVIII, 1308-1317  RAF to wind down with ringfencing of current obligations pp.LVIII - LIX, 1317- 1318  RABS subject to oversight of Ministry (social development / transport) and Board. Executive competency (managerial and financial experience in private sector) and administrative competencies (healthcare and pension administration) pp.LVIII, 1304-1308

34. Presentation to NCoP Wednesday 27 August 2003