Medical Tax Credits
“Those who live in our country should have access to housing, medical care, social security, water and education…”
Finance Minister Pravin Gordhan – 22 February 2017.
As indicated by the Finance Minister, consideration is being given to a possible reduction in the medical tax credit in the future. This is part of the financing framework for National Health Insurance, aimed at ensuring that all South Africans have equitable access to quality, affordable healthcare.
For the 2017/2018 tax year, the medical tax credit will be increased in line with inflation, as follows:
And in the case of –
an individual who is 65 and older, or if an individual, his or her spouse, or his or her child is a person with a disability, 33.3% of the sum of qualifying medical expenses paid and borne by the individual and an amount by which medical scheme contributions paid by the individual exceed three times the medical scheme fees tax credits for the tax year; or
any other individual, 25% of an amount equal to the sum of qualifying medical expenses paid and borne by the individual and an amount by which medical scheme contributions paid by the individual exceed 4 times the medical scheme fees tax credits for the tax year, limited to the amount which exceeds 7.5% of taxable income (excluding retirement fund lump sums and severance benefits).
Although the medical tax credit will be increased in accordance with the 2017 budget proposals, this may not be the case in future years. One of the proposed funding options for providing for the National Health Insurance Fund is, in fact, a reduction in the medical tax credit.
We will keep you updated as soon as further information becomes available.