The new medical contribution credits, effective for the 2013 tax year, may make medical aid cover more affordable for lower income earners according to Yusuf Dukander, project director of financial services at the South African Institute of Chartered Accountants (SAICA).
Dukander adds that taxpayers who belong to a medical scheme would now qualify for contribution credits whereas previously taxpayers were entitled to a deduction. The contribution credits are set at a fixed monthly amount for the taxpayer and first dependant, and two-thirds of this amount for additional dependants.
The majority of SA is uninsured
“The medical aid tax credits come at a crucial time in the lives of many South Africans; considering the fact that approximately 84% of South Africans are still living without medical aid cover.”
Of South Africa’s estimated 51,8million citizens, only 3,7 million are principal members and further 4,8 million dependents of one or other medical scheme.
“With the current tough economic times, many low- and middle-income earners might believe that financial limitations give them no choice but to risk their family’s health by either not having medical aid or reducing their cover.
“However, families should factor in the medical contribution credit when making this important decision due to the increased benefit.
“We encourage people who do not have medical aid to look at their finances and at the medical contribution credit to see if they can afford cover, says Dukander.”