Important information about medical tax claims in South Africa
While most South Africans are aware of medical aid tax credits and getting refunds from the South African Revenue Service (SARS) for this, out-of-pocket payments also qualify for tax claims.
However, claiming from the taxman for these payments is not a clear-cut process, says Tax Consulting South Africa.
The group noted that Section 6B of the Income Tax Act permits an additional medical tax credit on top of medical aid tax credits.
This allows for an additional medical tax credit claim (AMTC) on the condition that the out-of-pocket expenses align with the definition of qualifying medical expenses, as set out in the Act.
Tax Consulting said successful medical tax credit claims have amounted to additional medical tax credit claims between R2,000 and R100,000 per tax year.
The Council of Medical Schemes’ latest Industry Report confirms that at least R40 billion in out-of-pocket payments have been incurred by medical aid members during the 2023/2024 tax period.
These tax credits can stemming from out-of-pocket expenses such as laboratory test results, or to expenses for a dependent suffering from a disability.
However, the tax experts warned that this comes with a lot of hoops to jump through, and that SARS will not simply hand over money without fully testing the claim.
This requires taxpayers to fully substantiate their claims and to keep proper records of all these out-of-pocket payments.
“A significant practical challenge in claiming the additional medical tax credit lies in the requirement for adequate substantiation,” Tax Consulting said.
“Taxpayers cannot merely include medical expenses in their tax return and assume that the corresponding credit will be granted, without adequate substantiation.”
What taxpayers need to know
Tax Consulting warned that the burden of proof with AMTC claims lies with taxpayers and SARS requires supporting documentation for all amounts claimed as qualifying medical expenses.
This includes tax invoices, detailed schedules and medical scheme tax certificates issued by medical aid administrators.
Where the taxpayer has incurred medical expenses directly related to a disability, SARS further requires the taxpayer to submit a completed ITR-DD form, which is a formal confirmation from a registered medical practitioner.
The experts noted that taxpayers often overlook the obligation to retain supporting documentation for a minimum of five years, in accordance with the Tax Administration Act.
“Without these documents, even valid claims may be disallowed, underscoring the importance of diligent and proactive record-keeping,” it said.
The next thing that taxpayers need to be aware of is that there are limitations on the claim.
Specifically, the tax credit’s availability depends on the amount spent out-of-pocket, as well as personal circumstances, such as the income level, the age or disability status of the taxpayer or dependents.
“In ordinary cases, relief only applies if your medical expenses and excess contributions exceed 7.5% of your taxable income,” Tax Consulting said.
In addition to this, only 25% of the excess is claimable.
The group warned that this means that higher-income earners would have to incur higher out-of-pocket expenses for the tax credit to become applicable.
“Simply put, there is an inverse relationship between the expenses a taxpayer incurs and their taxable income after deductions,” it said.
The group added that the calculation of the AMTC is more lenient in cases where either the taxpayer or their child and/or spouse is disabled, or the taxpayer is 65 years and older.
In such cases, 33.3% of the sum of all qualifying medical expenses and the excess medical aid contributions is claimed.
“Understanding which category you fall under is essential before claiming,” it said.
What medical expenses qualify
Tax Consulting noted that the term “qualifying medical expenses” is broad.
It includes amounts that were paid during a tax year to registered medical practitioners, such as doctors, dentists, optometrists, osteopaths, herbalists, physiotherapists, chiropractors, or orthopaedists for professional services rendered, or medicines supplied to the taxpayer or their dependants.
It also includes payments to hospitals or nursing homes, registered or enrolled nurses, midwives, or nursing assistants for illness or confinement, as well as payments to pharmacists for prescribed medicines.
It further includes other medical expenses prescribed by SARS, incurred by the taxpayer due to a disability or mental impairment affecting either the taxpayer or their dependent.
In addition to the above, for medical expenses to meet the definition of “qualifying medical expenses”, they would also need to be “out-of-pocket”.
In other words, the medical expenses would have to be unrecoverable by the taxpayer or their spouse from any person, including medical aid funds. The taxpayer must have solely borne the costs.
With Tax Season 2025 in full swing and more than a month in, taxpayers still have time to submit their claim for AMTC. Tax filing for non-provisional taxpayers closes on 20 October 2025.
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