advertisement
23 February 2012

Changes to medical scheme tax

The conversion of medical deductions to medical tax credits comes into effect on 1 March 2012.

2

 

The conversion of medical deductions to medical tax credits comes into effect on 1 March 2012. These reforms are aimed at improving the fairness of the personal income tax system.

The system of medical tax credits is a more equitable form of tax relief as it reduces a tax payer’s tax liability, whereas medical deductions reduce a tax payer’s taxable income.

The monthly tax credits to be applied from 1 March 2012 to taxpayers below 65 years are:

R230 for the first two beneficiaries

R154 for each additional beneficiary

Where medical scheme contributions in excess of four times the total allowable tax credits combined with out-of-pocket medical expenses exceed 7.5% of taxable income, they can be claimed as a deduction against taxable income. With effect from 1 March 2014, these additional medical deductions will be converted into tax credits at a rate of 25% for taxpayers aged below 65 years.

From 1 March 2014, employer contributions to medical schemes on behalf of ex-employees will be deemed a taxable fringe benefit and such ex-employees will be able to claim the appropriate tax credits.

Tax payers over 65 and those with disabilities or with disabled dependants, will be converted to the tax credit system as from 1 March 2014. Currently these tax payers can claim all medical scheme contributions and out-of-pocket medical expenses as a deduction against their taxable income, and it would appear that this would continue for the 2012/2013 tax year.  

(Press release from Alexander Forbes Health, February 2012

 
NEXT ON HEALTH24X
advertisement

Read Health24’s Comments Policy

Comment on this story
2 comments
Comments have been closed for this article.

Live healthier

The debate continues »

Working out in the concrete jungle 7 top butt exercises for guys 10 things pole dancing can do for you

The running vs. walking debate

There are many different theories when it comes to the running vs. walking for health and weight loss.

Veganism a crime? »

Running the Comrades Marathon on a vegan diet Are vegans unnatural beasts? Can a vegan be really healthy?

Should it be a crime to raise a baby on vegan food?

After a number of cases of malnourishment in Italy, it may become a crime to feed children under 16 a vegan diet.