The mother pays the medical aid premium on behalf of her daughter who is still a student. Is it deductible by the mother?
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
In terms of section 6A(2)(a)(i) of the Income Tax Act, the medical scheme fees tax credit applies in respect of fees paid by the person (the mother) to a medical scheme registered under the Medical Schemes Act. Remember that this is a rebate and not a deduction.
The amount of the rebate then depends on whether or not it was paid in respect of the person (the taxpayer) or a dependent (the daughter). In terms of the Medical Schemes Act, 1998, “dependent” 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.
It is only for purposes of the additional medical expenses tax credit (section 6B), that child is further qualified. So, for section 6A purposes, the requirement is a ‘dependent child’.