A Medical Scheme Fees Tax Credit (MTC) is a rebate which, in itself, is non-refundable, but which is used to reduce the normal tax a person pays.
The MTC applies to fees paid by a taxpayer to a registered medical scheme (or similar fund outside South Africa) for that taxpayer and any “dependants”.
A dependant is a person who relies on the taxpayer, especially a family member, for financial support.
For the 2024 financial year, the MTC rate per month is R364 for the taxpayer, R728 for the taxpayer and one dependant and R246 for each additional dependant.
In addition to the MTC, an individual may also claim an Additional Medical Expenses Tax Credit for certain qualifying medical expenses, subject to limitation.
Amount regarded as qualifying medical expenses:
- Services rendered and medicines supplied by any duly registered medical practitioner, dentist, optometrist, homeopath, naturopath, osteopath, herbalist, physiotherapist, chiropractor, or orthopaedist;
- Hospitalisation in a registered hospital or nursing home;
- Home nursing by a registered nurse, midwife or nursing assistant, including services supplied by any nursing agency;
- Medicines prescribed by a registered physician and acquired from a registered pharmacist;
- Any expenses prescribed by the Commissioner and necessarily incurred as a result of any physical impairment or disability.
Calculation of the Additional Medical Expenses Tax Credit
1. A person who is 65 years of age or older may claim, 33.3% of the fees paid by the person to a registered medical scheme as exceeds three times the amount of the MTC to which that person is entitled; plus 33.3% of the qualifying medical expenses paid by the person.
2. A person who is, or whose dependant is a person with a disability, may claim, 33.3% of the fees paid by the person to a registered medical scheme as exceeds three times the amount of the MTC to which that person is entitled; plus 33.3% of the qualifying medical expenses paid by the person.
A person who wishes to claim an AMTC for disability expenses must first complete a Confirmation of Diagnosis of Disability form (ITR-DD) to allow a registered medical practitioner to diagnose and confirm, amongst others, the extent of the disability before the taxpayer submits an income tax return.
3. All other persons who do not qualify in the two categories above, may claim, 25% of the amount by which the sum of the amounts listed below exceeds 7,5% of the person’s taxable income before taking into account this AMTC:
a) All fees paid by the person to a registered medical scheme as exceeds four times the amount of the MTC to which that person is entitled; and
b) The qualifying medical expenses paid by the person.
