What would you do if you won the lotto? Fly or sail around the world? Own a Ferrari? Buy a swimming pool to fill with jelly babies? Have a chocolate fountain placed at your front door? People usually make lavish purchases when being given a lump sum of money. Don’t make the same mistake with your payout from the Road Accident Fund.
WHAT IS A PAYOUT FROM THE ROAD ACCIDENT FUND?
An individual will receive a payout from the Road Accident Fund if the court has awarded a settlement amount associated with the injury or death of an accident that occurred on a public road, and which was not caused by that individual. Payouts will include past and future accident related medical expenses, loss of earnings, past and future loss of support, and general compensation for pain and suffering and loss of amenities of life. Settlement amounts are predominantly future focused so how do you manage your lump sum payout to ensure that your future is secure?
MEDICAL COSTS COVERED BY THE PAYOUT FROM THE ROAD ACCIDENT FUND
The Road Accident fund is liable for your private medical expenses incurred and will form part of your settlement. These medical costs are known as your past medical costs as it had been incurred from the date of the accident until the date of settlement of your matter. In most instances, your medical aid is to be reimbursed for the sums paid on your behalf to the medical suppliers. The medical costs are therefore easy to allocate from the payout and can be done with little management from your side. In fact, your attorney should administer this on your behalf to ensure that your medical aid is reimbursed or that the portion you had to pay from your own pocket is recovered.
FUTURE MEDICAL COSTS TO BE INCURRED
The Road Accident Fund is similarly liable for all your future medical costs still to be incurred for the remainder of your natural life conditional that the medical treatment is directly related to the injuries suffered in the road accident. The Road Accident Fund is obliged to issue you with a Certificate in terms of the Act to keep you covered in this regard. However, please note that these medical costs are normally first to be paid by you personally and once incurred, you can recover these from the Road Accident Fund. You thus need to ensure that you have sufficient funds available in the future to cater for this. You are best advised to specifically ask your attorney to diligently explain the complexities in this regard.
GENERAL DAMAGES, LOSS OF EARNINGS AND LOSS OF SUPPORT
General damages, loss of earnings, past and future loss of support are paid out as a lump sum. It is thus an accelerated benefit, and one must be wise rather than lavish with the use of this portion of the payout from the Road Accident Fund. An attorney or financial advisor can provide valuable assistance with this. They can ascertain what your short and long term financial needs are and help you to invest the balance so that you can save funds for future use while increasing your capital. With a large payout comes a lot of responsibility. You need proper fund management to ensure that all your current and future needs are met.
Make sure that you get the professional input you need to make wise choices with your payout. A Ferrari might get you places in style but you will not be driving anywhere if you don’t have the finances left to pay for petrol or to look after your health.