My client has an aunt who is over 65 years of age and who is financially dependant on her. The aunt lives in a frail care centre. Her medical Aid from Discovery is in the name of the aunt and the contributions are deducted from her bank account. My clien
Important:
This answer is based on tax law year ending 28 February 2017.
Answer:
Contributions
In terms of section 6A(2)(a)(i), the medical scheme fees tax credit applies in respect of fees paid by the person 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.
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.
It is therefore the person who paid the contributions who is entitled to the rebate.
Medical expenses
The definition of ‘qualifying medical expenses’ refers to the person ‘or any dependant of the person’. In terms of the definition of in section 6B(1) a “dependant” means … (c) any other member of a person’s family in respect of whom he or she is liable for family care and support. In the Explanatory Memorandum when this section was introduced into the Act the following example was given:
“Facts: A single taxpayer under 65 years of age, and not disabled, incurs medical expenses on behalf of his or her mother. This taxpayer is liable for family care and support in respect of his or her mother.
Result: The taxpayer will be able to add the expenditure incurred in respect of his or her mother to his own medical expenditure.”
Section 6B therefore doesn’t use the term ‘immediate family’ that was used in the repealed section 18.
The expenses must be ‘qualifying medical expenses’ as defined.