Source: Johan van Tonder
Medical aid: How does it affect your tax?
Recent changes to the tax treatment of medical scheme contributions have opened the door to employers to provide more tax effective package structuring.
Minister Pravin Gordhan, in his Budget Speech in Parliament, announced that, in an effort to support further broadening of access to medical scheme membership, the monthly monetary caps for deductible medical scheme contributions are also increased.
Medical and disability expenses 2010/2011
- Taxpayers who are 65 and older may claim all qualifying expenditure
- Taxpayers under 65 may claim all qualifying medical expenses where the taxpayer or the taxpayer's spouse or child is a person with a disability
- Other taxpayers under 65 may deduct monthly contributions to medical schemes up to R670 for each of the first two dependants on their medical scheme and R410 for each additional dependant. In addition, they can claim a deduction for medical scheme contributions above the caps and any other medical expenses limited to the amount which exceeds 7,5% of taxable income (excluding retirement fund lump sums)