CLAIMING MEDICAL EXPENSES (Additional Medical Expenses Tax Credit)

What is it?

An Additional Medical Expenses Tax Credit (also known as an "AMTC") is a rebate which, in itself, is non-refundable, but which is used to reduce the normal tax a person pays. Any portion that is not allowed in the current year (usually that amount which exceeds the normal tax payable) can’t be carried over to the next year of assessment. It applies for years of assessment starting on or after 1 March 2014 (from the 2015 year of assessment) and is mostly calculated against qualifying medical expenses (for example, certain 'out-of-pocket' expenses) paid for you and any dependant. It is a rebate given in addition to the medical scheme fees tax credit (MTC), but is subject to limitation.  

What amounts are regarded as qualifying medical expenses?

These are amounts paid and not recoverable during the year of assessment in respect of you or any dependant, and include:
  • Services rendered and medicines supplied by any duly registered medical practitioner, dentist, optometrist, homeopath, naturopath, osteopath, herbalist, physiotherapist, chiropractor or orthopaedist;
  • Hospitalisation in a registered hospital or nursing home;
  • Home nursing by a registered nurse, midwife or nursing assistant, including services supplied by any nursing agency;
  • Medicines prescribed by any duly registered physician (as listed above) and acquired from any duly registered pharmacist;
  • Expenditure incurred outside South Africa in respect of services rendered or medicines supplied which are substantially similar to the services and medicines listed above;
  • Any expenses prescribed by the Commissioner and necessarily incurred as a result of any physical impairment or disability.

Who is a dependant?

A dependant is:
  • A spouse;
  • A child and the child of a spouse (e.g. son, daughter, step son, step daughter, legally adopted child)
    • Who was alive during any portion of the year of assessment, and who on the last day of the year of assessment:
      • Was unmarried and was not or would not, had he or she lived, have been:
        • Older than 18 years
        • Older than 21 years and was entirely or partly dependent for maintenance on the person and has not become liable to pay normal tax for the year
        • Older than 26 years and was entirely or partly dependent for maintenance on the person and has not  become liable to pay normal tax for the year and was a full-time student at an educational institution of a public character; or
      • In the case of any other child, was incapacitated by a disability from maintaining himself or herself and was entirely or partly dependent for maintenance on the person and hasn’t become liable to pay normal tax for that year;
  • Any other member of a person’s family for whom he or she is liable for family care and support (e.g. mother, father, mother-in-law, father-in-law, brother, sister, grandparents, grandchildren); or
  • Any other person who is recognised as a dependant of that person in terms of the rules of a registered medical scheme or fund.

Calculation of the Additional Medical Expenses Tax Credit

The AMTC will depend on a person’s age and whether the person, his or her spouse or his or her child any has a disability as defined.

1. A person who is 65 years of age or older may claim the following AMTC:
  • 33,3% of the fees paid by the person to a registered medical scheme (or similar qualifying foreign fund) as exceeds three times the amount of the MTC to which that person is entitled; plus
  • 33,3% of the qualifying medical expenses paid by the person (for example out-of-pocket expenses).
 
2. A person who is, or whose spouse or child is a person with a disability, may claim the following AMTC:
  • 33,3% of the fees paid by the person to a registered medical scheme (or similar qualifying foreign fund) as exceeds three times the amount of the MTC to which that person is entitled; plus
  • 33,3% of the qualifying medical expenses paid by the person (for example, certain out-of-pocket expenses).

Note that this concession is only available where the person, or his or her spouse or child is a person with a disability. It is not available in respect of any other dependant with a disability (for example, the person’s mother).

3. All other persons who do not qualify in the two categories above, may claim the following AMTC:

  • 25% of the amount by which the sum of the amounts listed below exceeds 7,5% of the person's taxable income (excluding retirement fund lump sum benefits, retirement fund lump sum withdrawal benefits, and severance benefits) before taking into account this AMTC:

(i) All fees paid by the person to a registered medical scheme (or similar qualifying foreign fund) as exceeds four times the amount of the MTC to which that person is entitled; and

(ii) The qualifying medical expenses paid by the person (for example, certain out-of-pocket expenses).

For further information on how to calculate the AMTC, please refer to the Guide on the Determination of Medical Tax Credits.

Need help?

  • Call the SARS Contact Centre on 0800 00 SARS (7277)
  • Visit your nearest SARS branch.

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Last Updated: 28/06/2019 2:36 PM     print this page
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