Welcome back to Week 2 of the Medical Aid Credits Series
What is Medical Scheme Fees Tax Credits?
- Medical Scheme Fees Tax Credits is a rebate which reduces the normal tax a person pays. This rebate is non-refundable and can’t be carried over to the next year of assessment.
- In other words, this rebate will reduce your normal tax to a lesser amount or nil, however it can’t create a negative amount.
- It applies for years of assessment starting on or after 1 March 2012 (from the 2013 year of assessment).
Who is it for?
- The Medical Scheme Fees Tax Credits effectively replaced part of the tax deduction that was specifically allowed for medical scheme contributions, and applies to fees paid by a taxpayer to a registered medical scheme (or similar registered scheme outside South Africa) for that taxpayer and his/her dependants (as defined in the Medical Schemes Act).
- Although the Medical Scheme Fees Tax Credit was introduced from 1 March 2012, it didn’t affect all categories of taxpayers at once. There are two different start dates depending on the age of the taxpayer:
- Taxpayers younger than 65 – converted to the Medical Tax Credit from 1 March 2012.
- Taxpayers 65 and older – converted to the Medical Tax Credit from 1 March 2014.
- This Medical Scheme Fees Tax Credits seeks to bring about greater fairness and help achieve greater equality in the treatment of medical expenses across all income groups
- The Medical Scheme Fees Tax Credits is a fixed monthly amount which increases according to the number of dependants:2015/2016 year of assessment (1 March 2015 – 28 February 2016)
- R270 per month for the taxpayer who paid the medical scheme contributions
- R270 per month for the first dependant
- R181 per month for each additional dependant(s)
2016/2017 year of assessment (1 March 2016 – 28 February 2017)
- R286 per month for the taxpayer who paid the medical scheme contributions
- R286 per month for the first dependant
- R192 per month for each additional dependant(s)
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Disclaimer: The information published in this article or newsletter is of general nature and should not be used without obtaining specific advice as to its application in your business or under your specific circumstances. Pay Solutions will accept no liability if the information is used without first obtaining specific advice from one of our consultants.