Tax Deductions for Medical Expenses 2016

A Medical Scheme Fees Tax Credit also known as an MTC 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. It applies for years of assessment starting on or after 1 March 2016 (from the 2017 year of assessment).

It’s for taxpayers who pay fees to a registered medical scheme or similar registered scheme outside South Africa for that taxpayer and his/her dependents as defined in the Medical Schemes Act. And MTC seeks to bring about greater fairness and help achieve greater equality in the treatment of medical expenses across all income groups.

The MTC is a fixed monthly amount which increases according to the number of dependents: 2016/2017 year of assessment is for 1 March 2016 – 28 February 2017. And it will be charged as R286 per month for the taxpayer who paid the medical scheme contributions. The taxpayer will also be charged more credits if they have children on their medical aid.

For the first dependent the taxpayer will receive an extra R286.00 and R192 per month for each additional dependent(s). Dependents can also be viewed as parents, if their unemployed and most importantly if you’re paying towards their medical contributions.

And even in a situation where a husband is the main member on the medical aid, but you as a wife has paid out of pocket for medical expenses. You could still claim for those medical expenses on your tax returns.

As the main focus of MTC is that the South African Revenue Services (SARS) focusses on who paid the contribution to the medical aid. Therefore who ever paid the contribution can claim the tax credit on their tax return. Even though someone else is the main member, as the one making the payments needs to submit their bank statements as proof to SARS if so required.


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