Where a taxpayer has a parent on their medical who is over 65 can the taxpayer claim over 65 medical allowances on their 2017 tax return? Please see attached SARS document for items 1 and 2
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
We didn’t look at the document from SARS. Our guidance is based on the relevant law. The SARS guide on the medical rebates (credits) is a good document and can be read if you have further questions.
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 the taxpayer) 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 dependant (the parent). 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 parent must be a “member 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.”
The age of the dependant, the parent, is irrelevant, but it also has no impact on the section 6A rebate as the amounts for person over and under 65 are the same. It is only for the section 6B one where age is relevant, but the age will there be that of the taxpayer and not of the dependant.