Great News for Anyone on Medical Aid in South Africa

Finance Minister Enoch Godongwana has delivered welcome relief for South Africans on medical aid in the 2026 Budget, announcing an increase in the medical scheme tax credit after three years of being frozen.

The medical aid tax credit will increase from R364 to R376 per month for the first two members of a medical scheme. For additional dependants, the credit will increase from R246 to R254 per month.

Medical scheme tax credits reduce the amount of tax individuals pay if they belong to a registered medical scheme. While the increase is relatively small, it provides some relief to households facing rising healthcare and living costs.

The adjustment follows calls from healthcare funders and industry groups for government to act to prevent hundreds of thousands of middle- and lower-income scheme members from being forced to leave their medical plans due to affordability pressures.

Ahead of the budget speech, Board of Healthcare Funders Managing Director Dr Katlego Mothudi urged government to increase the tax credit to help maintain access to private healthcare.

The future of the medical aid tax credit has also been uncertain due to the government’s plans to implement the National Health Insurance (NHI) scheme. The NHI Act includes provisions that would eventually remove the medical aid tax credit as part of the funding model for the new system.

However, the rollout of the NHI has been delayed and remains uncertain. Several constitutional challenges against the legislation are currently before the courts, which has effectively placed implementation on hold for now.

Healthcare industry representatives have warned that removing the tax credit too soon could place additional financial pressure on medical scheme members. They have urged government to maintain and gradually increase the credit until the future structure of the healthcare system becomes clearer.

For now, the 2026 adjustment provides modest but meaningful relief for millions of South Africans who rely on medical aid coverage.

Medical Aid Tax Credit Changes

How Much Could Families Save?

The medical scheme tax credit reduces the amount of income tax payable each month for members of a registered medical scheme. With the 2026 increase, families will receive slightly higher monthly and annual tax relief.

Example Savings in 2026/27

For example, a family of four will now receive R1,260 per month in medical aid tax credits instead of R1,220, translating to an additional R480 in tax relief per year.

While the increase may appear modest, it provides some relief to households facing rising medical aid premiums, healthcare costs, and broader cost-of-living pressures.

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