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May I deduct contributions made to my father's medical aid?

Posted 4 August 2012 under Tax Questions


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"This is a common problem here in South Africa, what to do if you pay for someone's medical aid. The practice is that you can claim this benefit, if asked for documentation from SARS you will obviously have to produce the records you have mentioned above."

Are there regulations / documented precedent that I can cite to support this? I am having difficulty in getting GEMS to understand my request for a tax certificate for another main member (my father) who's medical aid contributions were deducted from my bank account.

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TaxTimTaxTim says:
30 July 2012 at 21:10

If you pay the medical expenses of a "dependent" which is defined in the Medical Schemes Act as :

"“dependant” means—
(a) the spouse or partner, dependant children or other members of the member’s
immediate family in respect of whom the member is liable for family care and
support; or"

The Income Tax act allows you to claim this deduction and uses the following definition in s18 -

"(4A) For the purposes of this section “dependant” in relation to a taxpayer means—
(c) any other member of his or her immediate family in respect of whom he or she is liable for family care and support.."

So if you pay for your father's healthcare and he is dependent on you then the above regulations can be used as support. GEMS should be issuing your father the certificate, you can use this certificate as documentary proof in case SARS requires it.


Red says:
30 July 2012 at 22:37

Thank you for the prompt reply. What bothers me, though, is the definition of "liable for family care and support"

I would have them as dependants on my medical aid if GEMS had not set their threshold for "financially dependant" so low at the Social Pension amount of R1140.

Am I correct in justifying the tax deduction with the reasoning that GEMS' criteria for "financially dependant" is certainly their prerogative as a business, but that it does not trump the wide range of interpretations of this expression in the Income Tax and Medical Schemes Acts? The bottom line is that my parents would not be able to afford medical aid on their pension.


TaxTimTaxTim says:
30 July 2012 at 23:26

From a tax perspective if you are liable for their medical care, which would count as support, then you would be able to deduct any expenditure you outlay for their care. Do you also pay for other expenses of theirs?


Immortal says:
22 November 2012 at 20:36

Hi Tim

As per the above, I'm listed as a dependant on Momentum Health, with my wife as the principal member. However, I pay the premiums for the medical aid for myself, my wife and my two daughters. She's just the principal member for convenience, she doesn't earn an income so she is not liable to pay tax.

Obviously, the tax certificate is in her name.

Can I claim for the expenses and medical aid premiums that I pay for as a deduction?


TaxTimTaxTim says:
22 November 2012 at 21:08

Hi Immortal,

You are able to claim these premiums, SARS may query this and then you would need to substantiate why you pay the premiums and not her. However it should be acceptable.

Regards,
Tim


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