SARS Changes to Medical Aid Tax in South Africa
June 2024 - South African Revenue Service (SARS) is making tax changes for medical aids to simplify data submission and reduce audits for taxpayers with complex medical claims.
SARS will simplify the process and reduce the burden for taxpayers to submit medical aid data accurately and on time, reducing the burden of SARS medical aid data reporting.
The changes mainly relate to the data that is required from medical aid schemes.
This includes:
- Supplying information about Principal members with disabilities and their dependents
- Information on individuals making transactions for primary members
- Distinguish between permissible and non-permissible expenses, presently recorded as claims not compensated or insured by medical plans on the IT3(f) certificate
- Field 4, File Layout Version must be 3.
The Medical Scheme Contributions form now allows disabled taxpayers with multiple disabilities to select more than one disability. This can be done in both the Principal Member and Dependent Disability Information sections.
For ease of reference, the changes in the latest BRS (Version 1.08) are as follows:
- New fields 261 to 265 added and field 191 changed in Principal Member Disability Information record.
- Additionally, the Dependent Disability Information record includes additional fields from 266 to 270, and we have amended field 216.
SARS stated that these modifications will also permit it to diminish audit interferences, expedite the evaluation of tax returns, and aid in assigning medical tax credits to the rightful taxpayers.
Medical aids must provide the required data starting in September 2024. This data must be in accordance with the rules outlined in the external Medical Scheme Contributions Business Requirement Specification (BRS).
The new Medical Aid solution will be accessible for Trade Testing from August 12 to September 6, 2024. It can be accessed through Connect: Direct and Secured File Gateway [HTTPS]. If you have any questions about trade testing, please reach out to Bus_Sys_CDSupport@sars.gov.za with the subject Medical Trade Testing. For any trade testing queries, please contact Bus_Sys_CDSupport@sars.gov.za with the subject Medical Trade Testing.
SARS will give a 6-month grace period for submitting some data while stakeholders work towards full compliance.
SARS said that if there is partial compliance, they will need reasons and a date for full compliance.
The changes will be implemented during the 2024 tax season, which runs from July to October. However, they will not affect the third-party data collection that has already occurred.
Tax Season 2024 dates
- Individual taxpayers (non-provisional): 15 July 2024 to 21 October 2024
- Auto-assessment notices: 1 – 14 July 2024
- Provisional taxpayers: 15 July 2024 to 20 January 2025
- Companies & CC's: 15 July 2024 to 20 January 2025
- Trusts: 16 September 2024 to 20 January 2025
Frequently asked questions
What is a medical aid scheme fees tax credit?
In 2012 SARS introduced a Medical Scheme Fees Tax Credit (“MTC”). This non-refundable rebate reduces the normal tax payable by a person. SARS adjusts the rebate amount on an annual basis.
What impact does a medical aid tax credit have on my taxes?
The rebate reduces your taxable income for the tax year. In addition, qualifying medical expenses paid will further be able to reduce the tax obligations of the taxpayer.
What is the Medical tax credit for 2025 tax year?
For the tax year commencing on 1 March 2024, the monthly rebates for medical scheme contributions are as follows: Taxpayer: ZAR 364. First dependant: ZAR 364. Every subsequent dependant: ZAR 246.
Is medical aid refundable?
A Medical Scheme Fees Tax Credit (also known as an “MTC”) is a rebate which, in itself, is non-refundable, but which is used to reduce the normal tax a person pays.
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