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Medical tax credit where taxpayer pays someone else’s medical scheme contributions

Tuesday, 21 October 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: Can a taxpayer claim contributions paid for his mother's medical aid from his own income? Also what rules are used in terms of age? That of the taxpayer or the dependent?

The Taxpayer's mother is financially dependent on the taxpayer. The medical aid is in her name and all accounts that had to be paid from their own pocket were issued in the name of the mother. The taxpayer paid all contributions as well as additional accounts on behalf of his mother.

A: The medical scheme fees tax credit applies in respect of fees paid by the person to a medical scheme registered under the Medical Schemes Act.  It is then in respect of benefits to the person and one dependant.  For the purposes of section 6A a "dependant” in relation to a person means a "dependant” as defined in section 1 of the Medical Schemes Act.  

In terms of the Medical Schemes Act "dependant” means -

(a) the spouse or partner, dependent children or other members of the member's immediate family in respect of whom the member is liable for family care and support; or

(b) any other person who, under the rules of a medical scheme, is recognised as a dependant of a member.  

And a "member” means a person who has been enrolled or admitted as a member of a medical scheme, or who, in terms of the rules of a medical scheme, is a member of such medical scheme.  

In SARS Guide on the Determination of Medical Tax Credits and Allowances (Issue 4) it is stated that: "Immediate family” is a particular group of relatives used in rules of law. This group is limited to a person’s spouse or life partner, parents (including adopted and step-parents), children (including adopted and step-children) and siblings.  

Section 6A makes no reference to the age of the taxpayer, but section 6B does.  The age of the dependent is not relevant.  

Disclaimer: Nothing in this query and answer should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the answer, SAIT do not accept any responsibility for consequences of decisions taken based on this query and answer. It remains your own responsibility to consult the relevant primary resources when taking a decision.



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