If I am paying my mother's medical aid, which is separate from mine, do I still get the medical tax credit? If my employer pays my husband's medical aid where I am also a dependant, will I get the medical tax credit?
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 (by you) to a medical scheme registered under the Medical Schemes Act.
The amount of the rebate then depends on whether or not it was paid in respect of the person (the taxpayer) or a dependent (your mother). In terms of the Medical Schemes Act, 1998, “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.
So, for section 6A purposes, the requirement is that the mother must be a “members of the member's immediate family in respect of whom the member is liable for family care and support”.
SARS, in their guide, states the following:
“The term “immediate family” in the definition of “dependant” in the MS Act refers to a particular group of relatives used in rules of law. This group is limited to a person’s spouse or life partner, parents (including adoptive and step-parents), children (including adopted and step-children) and siblings.”
In terms of section 6A(3)(b), any fees that “has been paid by an employer of the person is, to the extent that the amount has been included in the income of that person as a taxable benefit in terms of the Seventh Schedule, deemed to have been paid by that person.” It therefore deems it to have been paid by your husband and the credit is not available to you.