All registered South African taxpayers can claim back for qualifying medical expenses that are not covered by their medical aid plans. Being able to claim has several benefits, including better healthcare access. Discover what medical aid expenses are tax deductible as Bloom explains the qualifying criteria, along with how to calculate your deductibles.

How are medical aid expenses tax deductible?

Medical aid expenses can be tax deductible under certain conditions. Taxpayers are allowed to claim deductions for contributions made to a registered medical scheme, subject to certain limits and conditions. The amount of the deduction will depend on the taxpayer’s age and the number of dependents they have, and whether anyone on the scheme has a disability. Only contributions to a registered medical scheme, like Momentum Health4Me, are tax deductible.

Benefits of having tax-deductible medical expenses

Some of the great advantages of being able to claim against medical expenses include some of the following:

1. Alleviate financial burdens. Many South Africans are cash-strapped and looking for ways to save money. When you have medical expenses that are tax-deductible, you reduce your tax liability, which means you will have more disposable income.
2. Reduced tax liability. This means that when you deduct your medical aid contributions and qualifying medical expenses from your taxable income, you can decrease the amount owed to the South African Revenue Service (SARS).
3. Better healthcare access. Claiming for medical expenses has the effect of making healthcare services more affordable. It also encourages people to take out medical aid or health insurance, which affords them access to private medical services.

Types of qualifying medical expenses that are tax-deductible

Tax regulations can become viewed as quite overwhelming, with many people wondering what medical aid expenses are tax deductible? Take a look at this explanation: registered taxpayers, who belong to a medical aid scheme, can claim deductions for qualifying medical expenses that are not covered by their scheme. Some examples of these qualifying medical expenses are:

• Medical expenses not covered by a medical scheme, like medical or dental consultations, surgical procedures, and hospitalisation costs. This could include a visit to the optometrist, homoeopath or any registered medical practitioner.
• Medical expenses of a dependent. You can claim a deduction for medical expenses incurred by a dependent on your plan, like a spouse or child, provided that the taxpayer has paid for the expenses.
• Disability expenses. You can claim expenses related to the treatment and care of a disability, such as the cost of specialised equipment, home modifications, or therapy.
• Expenses related to mental health. This includes expenses for consultations, treatment, and medication for mental health conditions like depression.
• Prescription medication. You can claim deductions for the cost of prescription medication, provided that it is not covered by the medical scheme.

Only qualifying medical expenses that exceed 7.5% of the taxpayer’s taxable income can be claimed as a deduction. Those who are not members of a registered medical aid scheme cannot claim a deductible for medical aid expenses.

Eligibility criteria – who qualifies for tax-deductible medical expenses?

All registered taxpayers who are members of a medical aid scheme that is recognised by SARS are eligible for claiming against medical expenses under the following criteria:

• Taxpayers who pay their own medical aid contributions. Contributions paid for by an employee are not tax deductible.
• If you have a valid tax invoice from your medical scheme that contains the amount of the contribution and the period for which it was made.
• Taxpayers who have exceeded the minimum threshold. You can claim a deduction for medical aid expenses that have exceeded a threshold.
• If you have paid for qualifying medical expenses. These are expenses not covered by your medical scheme and which exceed 7.5% of your total taxable income.

How to calculate your medical aid tax deductible?

In order to claim the deduction, you must have a valid tax invoice from your medical scheme, which shows the amount of the contribution and the period for which it was made. You must also be able to prove that the contributions were paid from your own funds, and have not been subsidised by an employer.

Calculating the medical aid tax deductible depends on your age, the number of dependents on your plan and the total amount of medical aid contributions and qualifying medical expenses you’ve accrued over the tax period. Here are some tips when it comes to calculating your deductible:

• First, calculate the total medical aid contribution paid during the tax year. This amount can be found on your taxpayer’s medical aid tax certificate.
• Determine your minimum threshold, which will differ each tax year. For instance: for the tax year 2022, the minimum threshold was R1,284 for the first beneficiary and R717 for each additional beneficiary thereafter.
• Subtract the minimum threshold from the total medical aid contributions paid.
• Then, calculate the deduction limit based on your age bracket. For taxpayers under the age of 65 years, the deduction limit is greater than 25% of one’s taxable income. For those who are 65 years and older, the deduction limit is the greater of 33.3% of one’s taxable income, per year.
• Once you’ve worked that out, you can calculate the deduction amount and compare this to the deduction limit calculated earlier. The lower of these two amounts is your medical aid tax deduction.

Record keeping

It’s important to keep accurate records of all medical aid contributions and medical expenses incurred during the tax year, including receipts and invoices. This will support your final tax deduction claim. If you’re not sure how to go about claiming, it’s advisable to consult with a tax professional to ensure that you are complying with all applicable tax regulations.

Bloom’s MediTax consultations can assist you with the collation of all your documents. They can provide the medical aid tax certificate and will even submit basic tax returns on your behalf, provided your membership fees are up to date for the assessment year.

Affordable medical aid plans with tax assistance

We hope our guide has answered your question: what medical aid expenses are tax deductible? Bloom is committed to providing affordable healthcare with our robust offering of medical aid plans We keep your budget top of mind when it comes to providing top-quality private healthcare. Contact our offices to speak with a trained consultant who can provide you with more information, compare our medical

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