Members of registered medical aid schemes in South Africa qualify for automatic deductions off their tax.
What is the medical scheme fees tax credit?
The medical scheme fees tax credit (MTC) is a non-refundable rebate deducted from the primary member’s total tax liability.
It’s a fixed monthly amount that increases according to the number of dependants.
When medical aid contributions are paid by the member in his or her personal capacity, the MTC is claimed as a refund on the annual tax return.
When the employer pays the monthly premiums, the member’s monthly tax liability is reduced accordingly.
2023 medical tax credit rates
In the 2022/2023 tax year, the following medical tax credits apply:
- R347 per month for the taxpayer and main member of the scheme
- R347 per month for the first dependant
- R234 per month for each additional dependant.
2022 medical tax credit rates
The MTC for the 2021/2022 tax year were as follows:
- R332 per month for the taxpayer and main member of the scheme
- R332 per month for the first dependant
- R224 per month for each additional dependant.
2021 medical tax credit rates
The medical tax credit rates for the 2020/2021 tax year were:
- R319 per month for the taxpayer and main member of the scheme
- R319 per month for the first dependant
- R215 per month for each additional dependant.
Taxpayers can only claim medical tax credits for the months in which they, and their dependants, are medical aid scheme members.
Additional medical expenses tax credit
Scheme members are entitled to a second medical tax rebate, the additional medical expenses tax credit (AMTC).
The AMTC offers tax relief in respect of qualifying medical expenses that aren’t covered by the medical aid scheme.
Available credits are dependent on the member’s age, and whether he or she, or a dependant, has a physical impairment or disability.
The AMTC can be calculated as follows:
Under 65 years of age without a disability
Total medical aid scheme contributions, minus
4 x the MTC, plus
qualifying medical expenses, minus
7.5% of taxable income, multiplied by 25%.
Under 65 years of age with a disability
33% of all qualifying medical expenses, plus
the amount by which the total medical scheme contributions exceed 3 x the MTC.
Over 65 years of age with or without a disability
33% of all qualifying medical expenses, plus
the amount by which the total medical scheme contributions exceed 3 x the MTC.
What qualifies as an additional medical expense?
Any out-of-pocket expenses in respect of consultations, services and medication from registered medical practitioners and associated healthcare providers, including orthopaedic surgeons, physiotherapists, chiropractors, homeopaths, herbalists, naturopaths, osteopaths and optometrists.
Expenses relating to home care by a registered nurse, nursing associate, nursing agency or midwife.
Costs of prescribed medications dispensed by a registered pharmacist.
Admission fees to a registered hospital or nursing home.
Money disbursed for treatment of a disability or physical impairment.
Medical expenses incurred outside South Africa, in line with the above.
How to get tax credit you’re owed
How you get your medical tax credit depends on your status as a taxpayer.
When you’re permanently employed, pay tax on a PAYE basis and your medical aid contributions are processed by the company, the responsibility lies with your employer to deduct the rebate from your monthly tax liability.
Provisional tax payers, who pay for their own medical aid contributions, enter the medical tax credit, as a rebate, on their annual income tax return.
How IFC can help you?
If you’re not a member of a medical aid scheme in South Africa, you won’t get the benefit of medical tax credits.
At IFC, we offer informed, objective advice about South African medical aid schemes and how medical tax credits could benefit you.
Call IFC on 0860 766 942 and one of our consultants will help you find the right medical aid, at the right price.
