How Much Does RAF Pay for Loss of Income in South Africa?

Under section 17 of the Road Accident Fund Act 56 of 1996 (as amended by the RAF Amendment Act 19 of 2005), the RAF pays 100% of the claimant’s proven past loss of net earnings arising from a motor-vehicle collision, subject to a monthly statutory cap prescribed by the Minister from time to time. Future loss of earnings — what the claimant would have earned but for the injuries — is calculated on an actuarial basis using pre-accident earnings as the baseline and is also subject to the same monthly cap on the resulting annuity-equivalent amount. Any percentage of contributory negligence found against the claimant reduces the recovery by that same percentage, and the claim must be supported by payslips, tax returns, or audited financial statements depending on the claimant’s employment status.

What “Loss of Income” Means Under the RAF

Section 17 of the Road Accident Fund Act 56 of 1996 (as amended) creates two distinct heads of claim that operate independently and are calculated separately:

• Past loss of earnings — income already lost from the date of the accident to the date of settlement or judgment.
• Future loss of earnings — income the claimant will continue to lose going forward because of lasting impairment to earning capacity.

Both heads are calculated on net (after-tax) earnings rather than gross package, so PAYE and UIF contributions are deducted before the calculation runs. The claimant must also prove that the loss was caused by bodily injury arising from the collision with an identified motor vehicle, and that the loss is directly attributable to the injuries sustained — not to some unrelated cause. Where a claimant had pre-existing earning limitations or unrelated health issues, the calculation isolates only the loss attributable to the collision.

How the RAF Calculates Past Loss of Earnings

Past loss is calculated as 100% of the claimant’s net monthly income at the date of the accident, multiplied by the number of months the claimant was unable to earn, up to the date of settlement or judgment. The figure used is the net income the claimant was actually earning at the accident date — not an average over the preceding year, and not a projected figure.

Where the claimant returned to work at reduced earnings, the past loss is the difference between pre-accident net income and post-accident actual net income, multiplied by the months affected. The monthly figure in either scenario is subject to the statutory cap prescribed by the Minister in terms of the Act, and the same cap applies to each monthly unit of past loss as well as to the annuity-equivalent figure for future loss.

Scenario	Monthly figure used in past-loss calculation
Claimant totally unable to earn after the accident	100% of pre-accident net monthly income (subject to the statutory cap)
Claimant returned to work at reduced earnings	Difference between pre-accident and post-accident net income (subject to the statutory cap)
Claimant returned to work at full pre-accident earnings	No past loss (no recovery for this head)

How the RAF Calculates Future Loss of Earnings

Future loss is calculated on an actuarial basis, using the claimant’s pre-accident net income as the baseline and projecting that figure forward over the claimant’s working life expectancy. The actuarial calculation accounts for contingencies such as mortality, retirement age, promotion patterns, and the likelihood that the claimant would have remained employed at that income level in the absence of the injury.

The calculation is performed by an actuary appointed by the RAF, or by a joint actuary agreed between the parties. The result is capitalised into a lump sum or, by agreement with the RAF’s concurrence, structured as a guarantee annuity. The same statutory monthly cap that limits past loss also caps the monthly figure fed into the actuarial calculation for future loss — the cap operates on the input to the actuarial model, not on the capitalised output.

This is the technical work that drives the bulk of a serious RAF settlement: a claimant with decades of remaining working life, a stable pre-accident income, and a clearly documented residual earning restriction will recover materially more on the future-loss head than a claimant close to retirement with a short remaining earning horizon. Burger Huyser Attorneys’ general litigation practice, led from the Roodepoort branch by Director Nadine Roesch-Prinsloo, runs this actuarial coordination alongside the documentary proof work for past loss.

The Statutory Cap and How It Moves

The cap is set by the Minister and published in the Government Gazette; it is adjusted periodically rather than tied to inflation automatically. Two practical consequences follow:

• Where the claimant’s actual pre-accident income exceeded the cap, the claimant recovers at the cap and not at the true earnings — this is a hard ceiling, not a guideline.
• Where the claimant’s actual pre-accident income was below the cap, the cap does not lift the recovery; the claimant recovers at the actual earnings.

Because the cap is adjusted periodically, the controlling figure is the cap at the date of settlement or judgment, not the cap at the date of the accident. A claimant settling years after the collision may recover on a higher cap than the one in force on the day of the collision — which is why prompt progress on a claim matters. Confirm the current figure with the RAF or with the instructing attorney before any settlement is concluded.

Contributory Negligence Reduces the Recovery

Under section 1 of the RAF Act, if the claimant is found to have been partly at fault for the collision, the recovery is reduced by the percentage of fault attributed to the claimant. A finding of, say, 20% contributory negligence reduces the loss-of-earnings recovery by 20% — and the same 20% reduction applies to every other head of damage claimed under the same collision (general damages, medical expenses, etc.).

The contributory-negligence determination is fact-specific. Speed, visibility, road conditions, the actions of the other driver, the claimant’s own conduct (seatbelt use, sobriety, observation), and the available evidence all feature in the assessment. Disputes on contributory negligence are common — particularly in collisions at intersections or with pedestrians — and a competent attorney will contest an unfair apportionment where the factual record supports it.

What an Employed Claimant Needs to Prove the Loss

For an employed claimant, the documentary record required to prove past and future loss of earnings is built from the following:

• Payslips for the 12-month period before the accident (or for the full period of employment if shorter than 12 months).
• An employer certificate confirming pre-accident remuneration, periods of absence after the accident, and any return-to-work arrangements.
• IRP5 tax certificates for the relevant tax years, plus the SARS tax assessment (ITR12 or ITR14) for the year preceding the accident.
• A medical report confirming the period of disablement and any ongoing work restriction that drives the future-loss claim.

What a Self-Employed Claimant Needs to Prove the Loss

Self-employed claimants face a heavier documentary burden because payslips and employer certificates are not available. The RAF requires the income record to be reconstructed from the underlying business records:

• Audited annual financial statements for at least the two financial years preceding the accident.
• SARS tax returns (ITR14) and assessments for the same period.
• Management accounts for the current financial year if the accident occurred part-way through it.
• Bank statements showing business income and the claimant’s drawings from the business.
• A sworn statement by the claimant explaining the impact of the injuries on the business’s operations and revenue.

Other Income Types the RAF Considers

The two main documentary categories above are not exhaustive. The RAF’s loss-of-earnings framework also covers:

• Commission-based earners — commission statements and employer records of the commission cycle are used to establish the pre-accident income baseline.
• Casual and informal-sector workers — UIF contribution records and SARS submissions are used where they exist; sworn statements and employer affidavits fill the gap where formal records are absent.
• Foreign nationals — earnings in foreign currency are converted at the exchange rate prevailing at the date of the accident.

Practical Things That Affect the Final Payout

Three procedural variables regularly change the size of the final recovery and are worth flagging before any settlement is signed:

Practical variable	Effect on the payout
Delay in lodging Form RAF 1	The claim form must be lodged within two years of the accident (or three months from the date the injury was first diagnosed by a medical practitioner, whichever is later). A delayed lodgement is a frequent reason for the claim being barred or compromised.
Failure to mitigate	Claimants are expected to take reasonable steps to return to work or find alternative work. A refusal of suitable lighter-duty work can reduce the future-loss figure on the basis that the claimant failed to mitigate.
Settlement vs judgment	Most RAF claims settle by agreement on a once-off lump sum, with the cap applied at the level of the agreed monthly figure. Litigated judgments occasionally capitalise future loss as a guarantee annuity structured by the parties.

Filing Layer in Gauteng: Johannesburg vs Pretoria

The Road Accident Fund is a national statutory fund, and the loss-of-earnings framework under section 17 applies uniformly to claimants in any province. The filing layer, however, is local: an RAF claim is instituted in the High Court (or the magistrate’s court, for claims within its jurisdictional ceiling) of the district in which the collision occurred. Gauteng-based claimants will commonly have their files lodged in the Gauteng Division of the High Court, sitting in either Johannesburg or Pretoria depending on the accident venue.

• A claimant injured in a Johannesburg collision files in the Gauteng Local Division (Johannesburg).
• A claimant injured in a Pretoria or Centurion collision files in the Gauteng Division (Pretoria).

The same statutory cap on loss of earnings applies in both seats — the cap is national — but the procedural interlocutory practice (opposed motion roll timing, settlement conference scheduling, settlement register mechanics) differs between the two seats, and a Gauteng-based attorney files in whichever seat has jurisdiction over the accident venue.

If you have suffered a loss of income because of injuries sustained in a motor-vehicle collision and want an attorney to quantify, claim, and recover from the Road Accident Fund on your behalf, contact Burger Huyser Attorneys’ general litigation team on 011 888 0246 (Linden / Randburg head office) or visit your nearest branch. Files are run by the litigation practice in coordination with the Gauteng Division seat that has jurisdiction over the accident venue, and the firm handles past loss of earnings, future loss of earnings, and contributory-negligence reduction arguments end-to-end. Initial consultations confirm the current statutory cap, the documentary record (payslips, IRP5s, audited statements, employer certificates), and the lodgement status of Form RAF 1 — bring the accident report, medical records, and any existing RAF correspondence to the first meeting.

Frequently Asked Questions

Is there a fixed amount the RAF pays for loss of income?

No. The RAF pays 100% of the proven past loss of net earnings up to the statutory monthly cap prescribed by the Minister, and an actuarial value for future loss of earnings up to the same cap. The cap is the maximum, not a flat rate — a claimant earning below the cap recovers at actual earnings, and a claimant earning above the cap recovers at the cap.

What is the current statutory cap on loss-of-earnings compensation?

The cap is set by the Minister of Transport and published in the Government Gazette under section 17 of the Road Accident Fund Act. It is adjusted periodically rather than automatically. The cap at the date of settlement or judgment — not the date of the accident — is the controlling figure. Confirm the current amount with the RAF or the instructing attorney before settling.

Does the RAF pay loss of income if the claimant was partly at fault for the accident?

Yes. The claim is not forfeited for contributory negligence. Under section 1 of the RAF Act, the recovery is reduced by the percentage of fault attributed to the claimant. A finding of 30% contributory negligence reduces the loss-of-earnings recovery (and every other head of damage) by 30%.

How is past loss of earnings calculated?

As the claimant’s net monthly income at the date of the accident multiplied by the number of months of disablement up to settlement or judgment, capped at the statutory monthly maximum. Where the claimant returned to work at reduced earnings, the calculation uses the difference between pre-accident and post-accident net income.

How is future loss of earnings calculated?

On an actuarial basis, using the claimant’s pre-accident net earnings as the baseline and projecting forward over the claimant’s working life expectancy. The result is capitalised into a lump sum or, by agreement, structured as a guarantee annuity. The monthly figure fed into the actuarial calculation is subject to the same statutory cap.

Can a self-employed person claim loss of income from the RAF?

Yes. A self-employed claimant must prove the loss using audited financial statements (typically two years preceding the accident), SARS tax returns and assessments, management accounts, and bank statements showing business income and drawings. Payslips and employer certificates are not available, so the documentary burden is heavier.

Does the RAF pay for loss of earning capacity if the claimant can still work but earns less?

Yes. Where the claimant returns to work at reduced earnings, both the past loss (calculated as the difference per month) and the future loss (calculated on the reduced-versus-pre-accident differential) are recoverable, subject to the statutory cap on the monthly figure.

How long does the claimant have to lodge a loss-of-income claim with the RAF?

Form RAF 1 must be lodged within two years of the accident, or within three months from the date the injury was first diagnosed by a medical practitioner, whichever is later. A delayed lodgement is the most common reason a claim is barred or compromised.