[FAQ] Section 6B tax credits for an individual that is not a member of a medical scheme

[FAQ] Section 6B tax credits for an individual that is not a member of a medical scheme

• 19 April 2021
• Individuals Tax
• The Tax Faculty

This article is based on tax law for the year ending 28 February 2021.

Background

A taxpayer is over 65 years old and is not a member of medical aid/ hospital plan.

Can an individual taxpayer get a section 6B tax credit for medical expenses if that individual does not have medical aid?

Answer

The Income Tax Act

You are correct that section 6B is not only available to an individual who is a member of a medical scheme. A hospital plan would not be a medical scheme but is not relevant to your request. The law, section 6B specifically, has in fact been materially amended since its introduction with effect from 1 March 2014.

The answer lies, in the first place, in section 6B(2) and then in the definition of ‘qualifying medical expenses’ (in section 6B(1)).

Section 6B(2) reads as follows:

“In determining the normal tax payable by any natural person there must be deducted an amount, to be known as the additional medical scheme fees tax credit, equal to the sum of the amounts allowed to that natural person by way of rebates under subsection (3).”

It doesn’t qualify the term ‘natural person’ as one having to be a member of a scheme. The definition also refers to “the person or any dependant of the person” and doesn’t require any of them to be a member of the fund.

The addition of “the amount of the fees paid by the person to a medical scheme” to the section 6B rebate is done to allow the individual to add the unclaimed portion of the contributions, over the 3 or 4 times the rebate amount, for purposes of the section 6B rebate.

Webinar Commentary

Further webinar commentary on Section 6A & 6B Medical Credits can be accessed here.

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