In 2012, Sars began making adjustments to the way medical expenses were factored for tax purposes. The system at that time allowed for higher refunds for deducted medical expenses if you earned a higher income. Since then, the changes have sought to make deductible medical expenses more equal across all income levels.
Effective March 2012 SARS introduced what is known as a Medical Scheme Fees Tax Credit. First, your medical aid contributions are deductedagainst your taxable income. This medical credit is a tax credit, which is deducted from your overall tax liability. The medical tax credit consists of two amounts:
- The medical scheme fees tax credit
- The additional medical expenses tax credit