How do you claim for loss of earnings from the RAF?
Every healthy person has the ability to work and earn an income to support himself and his/her dependents. If they are injured this can result in not being able to work until they have recovered or may mean that they may never be able to work normally again.
If you are employed, or are an entrepreneur or own a business, you can claim your loss of earnings, from the Road Accident Fund (RAF), if your injuries were as a result of a motor vehicle accident. In cases of students who have yet to work, specialists would be able to estimate what the average income would have been depending on the injured person’s capabilities and intended future career.
What are the conditions for you to claim?
- Another driver must have been responsible or partially responsible for the accident.
- You suffered physical injuries which resulted in you being unable to work due and lose income.
- You must be able to prove that you lost income.
- You cannot claim if you were the only person involved in the accident, such an in cases where a tyre burst or an animal crossing the road caused the accident.
For more information on RAF claims see click here
What is loss of earnings or loss of earning capacity?
Loss of income refers to the income you have lost or will lose in the future due to the injuries you suffered as a result of the accident. This is also referred to as the loss of the capacity (ability) to earn an income.
Is there a limit on the amount which you can claim?
Because of the many claims that the RAF has to pay every year, the RAF also has to pay claimants within its budget. A few years ago, the decision was made to limit or place a “cap” on the amount that claimants could be awarded per year. This was done to ensure that all claimants receive compensation and that the budget is not spent on one claim. An example would be that if a superstar such as Beyoncé with a yearly income of R10 billion per year gets injured, the RAF would have had to spend their whole budget on that one claim.
An example of such cases before the threshold was implemented is found in this article https://www.news24.com/SouthAfrica/News/Swiss-man-claims-R16bn-20080109
With the new more fair system, it is possible to at least pay all claimants parts of their loss rather than pay out just one big claim. The RAF has recently adjusted this limit to a cap of R289,957.00 per in line with inflationary increases since 2008. Where a person earns R500 000.00 per year and now is not compensated fully, they are able to claim the balance from the responsible driver. It would be important that legal steps be taken in time.
Click here to read more on the cap
How do you prove your loss of earnings?
If you are a salaried employee you can easily prove the loss of income because you can produce a payslip. Many entrepreneurs do not have a formal payslip and proving earnings can be complicated.
How do self-employed or piece job workers prove income?
In cases where claimants do piecework, get paid cash, and do not have a bank account it may be difficult to show proof such as payslips or bank statements proving how much that person was earning. In such cases, if it is possible to have previous employers confirm that you had done work for them, it could be calculated on the basis of the minimum wage. Your attorney would assist in calculating this by involving experts such as Industrial Psychologists, Actuaries, or Forensic Accountants who can provide earnings estimations.
How do business owners claim loss of income?
If the RAF is held to be liable to compensate you, you will need to show that your business was profitable and how your injuries negatively affected your business because you were, or are, unable to work.
What proof do business owners need to provide to support their 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 have a new business then you will have to submit bank statements.
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 point of sales
- Details of contracts with customers
- Details of any future contracts with customers
Article source: https://citizen.co.za/business/2158991/how-to-claim-from-the-road-accident-fund-for-loss-of-earnings/