At TaxTim we receive many questions from taxpayers who pay medical aid for dependent family members and who want to know if they can claim for this in their tax return.
When paying medical aid contributions for a ‘financial dependent’ the medical scheme fees tax credit applies in respect of fees paid by the person to a medical scheme. This means that the person who is paying the medical aid will receive the medical tax credits, and not the dependent/member of the medical aid.
Who is a ‘dependent’?
A dependent is generally considered the spouse or partner, dependent children (including adopted or step) or other members of the member's immediate family (e.g mother or father) who is financially dependent on the taxpayer.
For example, if you pay for your elderly father's medical aid and he is financially dependent on you, then you should be able to claim the medical tax credit in your tax return.
Who is a ‘member’ of the Medical Aid?
A "member” is someone who belongs to a medical aid. The principal member is the main member of the medical scheme. For the purposes of tax, we often refer to the main member and their dependents.
Where to claim it in my tax return?
You will need to enter the details of the medical aid in the medical section of the tax return. The ITR12 has two sections for medical aid details. The first is for your own medical aid, where you are the principal/main member and the second one is for where you are not the principal/main member of the medical aid and you are paying for the costs for a financial dependent. It is the second section, which is relevant for the purposes of this blog.
If you are using TaxTim to complete your return, you can simply answer our easy questions in the medical section and we will ensure your medical aid details are entered in the right place in your tax return.
What supporting documents do I need for SARS?
If you do claim medical credits as a result of paying medical aid for a dependent, where you are not the main member of the medical scheme, then it is almost certain that SARS will audit you. In this case, be sure you have the following:
The medical aid tax certificate in the financial dependent’s name,
Proof of payment to the medical aid (bank statements)
Letter explaining why this dependent is currently financially relying on you.