What is the Medical Scheme Fees Tax Credit?
In 2012 SARS introduced a Medical Scheme Fees Tax Credit (“MTC”). This is a non-refundable rebate which is used to reduce the normal tax a person pays. The rebate amount is adjusted by SARS on an annual basis.
The MTC consists of two amounts, namely:
- The medical scheme fees tax credit; and
- The additional medical expenses tax credit (if any)
The MTC rebate applies to the fees that you pay to a registered medical scheme in South Africa. This includes the fees that you pay on behalf of yourself and your registered dependents. It is a fixed monthly amount and increases according to the number of dependants on the medical scheme.
If your medical scheme contributions are paid via your employer, i.e., as a deduction from your salary or wages, your employer will adjust your monthly PAYE tax accordingly.
2022 / 2023 Medical Scheme Fees Tax Credit rates
For the 2022/2023 tax year, the MTC are as follows:
- R347 per month for the main member of the scheme (the taxpayer)
- R347 per month for the first dependant on the scheme
- R234 per month for each additional dependant on the scheme
2023 / 2024 Medical Scheme Fees Tax Credit rates
For the 2023/2024 tax year, the MTC are as follows:
- R364 per month for the main member of the scheme (the taxpayer)
- R364 per month for the first dependant on the scheme
- R246 per month for each additional dependant on the scheme
What is the additional medical expenses tax credit?
This is a second medical tax rebate MTC rebate where the overall amount of tax you need to pay at the end of the tax year may be reduced. This rebate refers to the sum of all the additional expenses (out-of-pocket expenses) you have spent on qualifying medical expenses in a particular financial year that weren’t covered by your medical scheme.
The additional medical expenses tax credit offers tax relief in respect of certain qualifying medical expenses that are not covered by a medical scheme. Available credits depend on the main member’s age, and whether he / she / or a dependant has a physical impairment or disability.
Qualifying out-of-pocket medical expenses
Only certain out-of-pocket medical expenses qualify to be included in this MTC rebate. These are:
- Consultations, medical services and medications from a registered medical practitioner, dentist, orthopedist, physiotherapist, optometrist, osteopath, chiropractor, herbalist, homoeopath or naturopath.
- Admission to a registered hospital or nursing home.
- Home-care by a registered nurse, nursing assistant, nursing agency or midwife.
- Medicines prescribed by a duly registered physician and acquired from a duly registered pharmacist.
- Medical expenses incurred outside of South Africa and which are largely similar to the services and medicines listed above.
- Money paid towards the treatment of a physical impairment or disability, on condition that it is one of the qualifying expense prescribed by the Commissioner.
Unless specifically prescribed by a registered medical practitioner and acquired from a pharmacist, over-the-counter medicines (such as cough syrups, headache tablets or vitamins) do not qualify as medical expenses.
What counts as a disability?
Qualifying disabilities include moderate to severe mental, physical, hearing, intellectual, communication or vision disabilities. You and a registered medical professional must complete and submit and “ITR-DD form” in order to qualify as having a disability.
For More Information contact Genesis Medical
For more information about medical scheme fees and medical tax credits, or to enquire about one of the hospital plans or comprehensive medical aid plans, please browse our options below or contact us today.
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