MEDICAL TAX CREDITS

Taxpayers may be entitled to two medical credits:

1. A credit on contributions made to your medical aid (Medical Scheme Fees Tax Credit); and
2. An additional medical expenses tax credit in respect of qualifying medical expenditure paid by you that is not recoverable (for example, from a medical aid). This is also called qualifying out-of-pocket medical expenses.

Where you make contributions to a registered medical aid for yourself and any dependents, you qualify to claim a Medical Scheme Fees Tax Credit (MTC). The MTC is set at a fixed monthly amount for every month of your membership during the relevant tax year. For the 2023 Tax Year (the period from 1 March 2022 – 28 February 2023), it is calculated as follows:

• R347 per month for the taxpayer who paid the medical scheme contributions (you get this credit even if your employer pays the contributions on your behalf) or for a dependant who is a member or a dependant of a member of a medical scheme or fund, where you, yourself, is not a member of a medical scheme or fund but pay the medical scheme contributions;
• R694 per month for the taxpayer and one dependant; or R694 in respect of two dependants where the taxpayer themselves is not a member of a medical scheme or fund; and
• an additional R234 per month for each additional dependant.

A dependant is:

• A person’s spouse;
• A person’s child and the child of a spouse (e.g. son, daughter, stepson, stepdaughter, legally adopted child). A “child”, as defined, means a person who was alive during any portion of the tax year and who, on the last day of the tax year:
  • Was unmarried and was not or would not, had they lived, have been:
    • Older than 18 years;
    • Older than 21 years and was wholly or partly dependent for maintenance on the person and has not become liable to pay normal tax for the year;
    • Older than 26 years and was wholly or partly dependent for maintenance on the person and has not  become liable to pay normal tax for the year and was a full-time student at an educational institution of a public character; or
  • In the case of any other child, was incapacitated by a disability from maintaining themselves and was entirely or partly dependent for maintenance on the person and hasn’t become liable to pay normal tax for that year;
• Any other member of a person’s family for whom they are liable for family care and support (e.g. mother, father, mother-in-law, father-in-law, brother, sister, grandparents, grandchildren); or
• Any other person recognised as a dependant of that person in terms of the rules of a registered medical scheme or fund.

The Additional Medical Expense Tax Credit (AMTC) is a rebate that reduces the tax payable by the taxpayer in respect of qualifying out-of-pocket medical expenses. The AMTC is additional to the MTC and can be claimed irrespective of whether you are a medical aid member.

Out-of-pocket medical expenses are amounts paid and not recoverable during the year of assessment in respect of you or any dependant and include:

• Services rendered and medicines supplied by any duly registered medical practitioner, dentist, optometrist, homeopath, naturopath, osteopath, herbalist, physiotherapist, chiropractor or orthopaedist.
• Expenses paid to a nursing home or hospital or any duly registered or enrolled nurse, midwife or nursing assistant, including services supplied by any nursing agency.
• Medicines prescribed by any duly registered physician (as listed above) and acquired from any duly registered pharmacist.
• Expenditures incurred outside South Africa which have been paid and are substantially similar to the services and medicines listed above.
• Any expenses prescribed by the Commissioner and necessarily incurred as a result of any physical impairment or disability.

How the AMTC is calculated will depend on the taxpayer’s age and whether the taxpayer or their dependents have a disability, and you should revert to your tax advisor for assistance. To claim the AMTC, keeping all the slips and invoices of your additional medical expenses as proof is essential.