Staff author
Medical tax credits: What counts beyond your monthly premium
Taxpayers receive a standard monthly tax credit for their medical scheme contributions. Taxpayers can also claim an Additional Medical Expenses Tax Credit for qualifying out-of-pocket healthcare costs under Section 6B of the Income Tax Act.
How it works
The primary medical credit (Section 6A) is usually populated correctly on an auto-assessment. The secondary credit (Section 6B) must be claimed manually. It covers expenses like dental work, physiotherapy, and prescribed medication that your scheme rejected or only partially funded. The calculation uses a formula that factors in your taxable income and existing credits.
Specific Scenarios
* Scenario 1: Exhausted savings. Your medical scheme's savings account runs out in August. For the rest of the tax year, you pay for GP visits and chronic medication in cash. You must request a formal tax certificate from your scheme summarizing these unrecovered expenses.
* Scenario 2: Specialist shortfalls. A specialist surgeon charges 300% of the medical aid rate for a procedure. You pay the massive shortfall directly. You keep the original invoices and submit them to SARS to activate the Section 6B formula.
* Scenario 3: Non-scheme members. You do not belong to a medical aid at all, choosing to pay for private healthcare in cash. You can still claim qualifying out-of-pocket expenses under Section 6B, provided you keep meticulous records of every invoice and receipt.
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When you are not eligible
Expenses for non-prescribed medicines, cosmetic surgery, or treatments by unregistered practitioners do not qualify. Furthermore, a taxpayer earning R500,000 a year would need over R37,500 in out-of-pocket expenses just to cross the 7.5% threshold required to trigger the benefit.
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Disclaimer:This article is for informational purposes only and does not constitute financial or tax advice, and is not exhaustive. Tax laws are complex and subject to change. We strongly recommend consulting with our registered tax practitioner to address your specific circumstances.