< All Topics
You are here:

Medical Scheme Fees Tax Credit

Medical Scheme Fees Tax Credit

Medical Scheme Fees Tax Credit

From the 2014 tax year (it was phased in from 2012), all taxpayers can claim a Medical Scheme Fees Tax Credit on contributions paid to a registered medical scheme.

A tax credit is a non-refundable rebate. This means that a portion of your qualifying expenses, in this case, medical-related expenditure, is converted to a tax credit, which is deducted from your overall tax liability (the amount of tax you have to pay SARS for that particular tax year). You can’t carry any unused credit over to another tax year, and it won’t ever result in a tax refund from SARS.

Additional Medical Expenses Tax Credit
What is it?

An Additional Medical Expenses Tax Credit (also known as an “AMTC”) is a rebate that, in itself, is non-refundable but is used to reduce the normal tax a person pays. Any portion that is not allowed in the current year (usually that amount which exceeds the normal tax payable) can’t be carried over to the next year of assessment. It applies for years of assessment starting on or after 1 March 2014 (from the 2015 year of assessment) and is mostly calculated against qualifying medical expenses (for example, certain ‘out-of-pocket’ expenses) paid for you any dependant. It is a rebate given in addition to the Medical Scheme Fees Tax credit (see above) but is subject to limitation.

What amounts are regarded as qualifying medical expenses?

These 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, homoeopath, naturopath, osteopath, herbalist, physiotherapist, chiropractor, or orthopaedist;
  • Hospitalisation in a registered hospital or nursing home;
  • Home nursing by a registered 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;
  • Expenditure incurred outside South Africa in respect of services rendered or medicines supplied which 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.
Calculation of the Additional Medical Expenses Tax Credit

The AMTC will depend on a person’s age and whether the person, spouse, or child has a disability as defined. A person who is 65 years of age or older may claim the following AMTC:

  1. A person who is 65 years of age or older may claim the following AMTC:
    • 33,3% of the fees paid by the person to a registered medical scheme (or similar qualifying foreign fund) that exceeds three times the amount of the MTC to which that person is entitled; plus
    • 33,3% of the qualifying medical expenses paid by the person (for example, out-of-pocket expenses).
  2. A person who is, or whose spouse or a child is a person with a disability may claim the following AMTC:
    • 33,3% of the fees paid by the person to a registered medical scheme (or similar qualifying foreign fund) exceeds three times the amount of the MTC to which that person is entitled; plus
    • 33,3% of the person’s qualifying medical expenses (for example, certain out-of-pocket expenses).
    • Note that this concession is only available where the person or their spouse or child is a person with a disability.​​ It is not available regarding any other dependant with a disability (for example, the person’s mother). In cases where a person wishes to claim a qualifying medical expense for a dependant (in other words, other than his or her spouse or child), the AMTC can be claimed in the third category below.
  3. All other persons who do not qualify in the two categories above may claim the following AMTC:
    • 25% of the amount by which the sum of the amounts listed below exceeds 7,5% of the person’s taxable income (excluding retirement fund lump sum benefits, retirement fund lump sum withdrawal benefits, and severance benefits) before taking into account this AMTC:
      • All fees paid by the person to a registered medical scheme (or similar qualifying foreign fund) exceeds four times the amount of the MTC to which that person is entitled; and
      • The qualifying medical expenses paid by the person (for example, certain out-of-pocket expenses).

Medical Tax Credit Rates for the 2019 to 2022 Tax Years

Per month (R) 2022 2021 2020 2019
For the taxpayer; or for a dependant who is a member of a medical scheme or fund, where the taxpayer him- or herself is not a member of a medical scheme or fund R332 ​R319 R310 R310
For the taxpayer and one dependant; or in respect of two dependants where the taxpayer him- or herself is not a member of a medical scheme or fund ​R664 R638 R620 R620
For each additional dependant R224 R215 R209 R209

Contact Onestop Accounting with any Medical Scheme Fees Tax Credit queries.

Table of Contents