Tax Relief on Medical Schemes

Govt announces tax relief for the public The announced tax relief should offer us a small respite from the increasing medical aid contributions

The rising costs in South Africa and the rest of the world have affected nearly everything that consumers spend their money on today.

One of the most expensive commodities in South Africa today is medical care, and matters are not helped by the fact that some of the country's top medical schemes announced that they were putting up their contribution prices by as much as 16.7%.

Discovery Health, for example, increased its member contributions by 12.4% and the Government Employees Medical Scheme said that it, too, was putting up its prices by 11.18% for this year.

However, the Finance Minister, Treveor Manuel, has provided some relief for struggling consumers after announcing that the government would increase the amount received as a tax free subsidy from an employer, or the amount claimed as a tax deduction for contributions made to medical schemes.

At present it is possible for consumers to receive a subsidy or claim a tax reduction for themselves and their first dependent for the sum of R570 a month on contributions to medical schemes. From March 1, this amount will increase 9.6% to R625.

Relief will also be given on any further dependents registered with a scheme, with an increase of 10.1% from R345 to R380.

While the increase is not in line with the rise in contributions demanded by South African medical schemes, the news has still been welcomed by consumers as they struggle to pay for their day to day expenses.

Talks continue in the government to launch a National Health Insurance scheme that will cover all South Africans, whether they can afford to pay for medical expenses or not.