- Primary medical aid tax credits are allowed for anyone that contributes to a medical aid (EXCLUDES MEDICAL INSURANCE POLICIES!)*. The credits allowed is R319 per persons per month for the first two beneficiaries and R215 for each additional dependent. That means that, for one person on the medical aid and amount of R319 x 12 = R3,828 will be a tax refund/reduction to your tax liability. If there are 2 members on the medical aid, the amount will increase to R7,656, 3 members R10,236, 4 members R12,816 and so on.
- In order to claim primary medical tax credits, you will need to provide us with an annual medical aid tax certificate issued by your medical aid scheme.
- Your medical aid certificate will show
- the number of members per month for the year
- your total contribution to the medical aid for the year
- any out of pocket medical expenses submitted to the the medical aid BUT NOT PAID by them.
- Medical tax credits can only be claimed against a tax liability/taxes already paid. In other words, you will only be able to claim to the maximum amount you already paid as tax (or against taxes not yet paid).
* Medical insurance in South Africa is not regulated as Medical Aids are. Contributions to medical insurance is not recognized by SARS and you cannot claim medical tax credits if you only contribute to a medical insurance policy.
ADDITIONAL MEDICAL TAX CREDITS
- Additional medical tax credits are for out-of-pocket expenses NOT paid for by the medical aid.
- Additional medical tax credits are determined using an involved formula, based on your medical expenditure and your taxable income. In simple terms, the more you earn the less you can claim in additional medical tax credits. For this reason higher income earners frequently do not qualify for additional medical tax credits, unless they accrued exceptionally high medical bills usually only associated with severe illness and hospitalization.
- Medical tax credits can only be claimed against a tax liability/taxes already paid. In other words, you will only be able to claim to the maximum amount you already paid as tax (or against taxes for the year not yet paid). If you are not on medical aid, you can claim additional medical aid tax credits, but this will only apply if you have at least R6,233 (2021 tax year) in medical expenditure in the 18% tax bracket.
- From a logistic and administrative perspective, the easiest way to claim additional medical tax credits, is to ensure that ALL medical receipts are submitted to your medical aid, regardless if you are eligible for a refund from them or not. The additional medical expenses will then reflect on your medical aid certificate which is automatically accepted by SARS as legitimate claims.
- What if you have additional medical expenses that you paid for does not reflect on your medical aid certificate? The only way to claim additional medical tax credits for this, is to provide receipts, invoices and statements for all medical expenditure that you paid for yourself (including everything that went through to the medical aid); on your tax return, we will then have to reflect a nil for out-of-pocket medical expenses as shown on your medical aid certificate and only claim expenses based on the receipts, invoices and statements you provide. Communication from SARS indicate that additional medical expense claims reflecting both out-of-pocket receipts and invoice and the out-of-pocket amount on the medical aid certificate, will be summarily rejected. Practically we will look at the highest total and only submit that, e.g. you have R20,000 reflected as out-of-pocket medical expenses on your medical aid certificate and you invoices and receipts total R19,000 - we will only submit your medical aid out-of-pocket claim.
- BEWARE! Claiming out-of-pocket medical expenses NOT reflected on your medical aid certificate will (in our experience) result in an automatic SARS audit/review. We therefore advise clients not to claim these type of additional medical expenses unless there are substantial financial gains to be had after considering the additional costs in processing the review/audit and factoring in the delay in refund payments.
- What medical expenditure can you claim:
- Any legitimate invoice, receipt or statement from a Health Professionals Council of South Africa (HPCSA) registered medical practitioner.
- Medication for which you received a doctors script.
- What can you NOT claim:
- Any invoice or receipt not falling within the tax year.
- Any off the shelf or over-the-counter medication.
- Any consultation done by a medical practitioner NOT registered with the HPCSA.
PENSIONERS AND DISABILITY MEDICAL CLAIMS
SARS has made medical credit concessions for persons over the age of 65 and people with disabilities.
- For pensioners, this means that a different formula applies in the calculation of additional medical tax credits. The income related exclusion does not apply and 33.3% (not just the usual 25%) of qualifying MEDICAL expenses can be claimed as a refund.
PERSONS WITH DISABILITIES
- Confirmation of disability: To qualify for the SARS disability benefit a ITR-DD form must be completed by a certified health professional and the degree of disability needs to be shown as moderate to severe.
- As for pensioners, SARS works with an adjusted formula and the income related exclusion does not apply and 33.3% (not just the usual 25%) of qualifying medical expenses can be claimed as a refund.
- In addition to the normal out-of-pocket medical expenses, additional medical and non-medical claims for expenses specific to the disability can also be claimed. This includes over the counter medication, specialized equipment, necessary disability related supplies and more. Please contact us for more information.
OTHER IMPORTANT CONSIDERATIONS
- IT is possible to claim contributions to a dependents medical aid, e.g. a parent that is unemployed or on pension. SARS will require proof that the debit order is from your account and that the person qualifies as a qualifying dependent - PLEASE CHECK WITH US IF YOU ARE NOT SURE.