EP12: Tax Relief Through Medical Credits: What SARS Won’t Tell You (But Should)

In this episode of The Rev Room, Francois sits down with tax specialist Nolu to demystify one of the most overlooked tax advantages in South Africa—medical tax credits and disability deductions. They break down the two types of medical tax credits (MTC and ATMC), clarify what’s claimable (and what’s not), and expose the massive savings many founders unknowingly forfeit every year. From understanding how dependents with disabilities affect your claim to practical tips for improving your SARS submissions, this conversation is packed with insights that could put real money back in your pocket.

3 Key Takeaways

1. Medical tax credits (MTC) are rebates, not deductions - They reduce your tax liability directly, offering relief based on your medical scheme contributions—R364 per member/spouse and R246 per dependent, per month.
2. Disability-related expenses offer major tax relief - With SARS-approved documentation, you can claim up to 33% back on expenses like special schooling, tutors, or therapy related to a dependent’s disability.
3. Most people are leaving money on the table - Gap cover and insurance don’t qualify—but medical scheme payments do. By submitting every invoice to your scheme (even if unpaid), you improve your tax return accuracy and reduce manual documentation at year-end.

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Transcript

welcome everyone today
we in the Rev room and we gonna talk everything about
medical tax credits and what you are able to claim um
this is an area Nalu where I think people lose out
because they don't really understand
the medical tax credits and we
and we gonna take them through the the m t C
which is the medical tax credits
and we also gonna talk about the additional
medical tax credits so
there are two different types of tax credits
where you can get a refund of the P a
y E
or tax that you've paid during the course of the year
Nola will you first take us through m t C
which is medical tax credits and how it works
hello Wayne thank you so much
so uh medical tax credit is a rebate
it's not a deduction
and it decreases your tax liability
not your income tax that's how it is designed
and then the additional medical tax credit is a
for
additional medical expenses
that were not covered by your medical aid yes okay
so if we look at and that's
that's a pretty much a standard deduction you
you depending on how many dependents you got
and I think
the one thing that we just need to be careful on that
is that it has to be a payment
to a medical scheme yes
the keyword is a medical scheme
it's registered with the
the medical body and it's not insurance
so your gap cover
medical insurance is specifically excluded
yes it is that correct
yes it is Ryan
if we look at ATMC so this is your
basically where you are incurring other medical costs
and this refers to
in terms of where you have a hospital plan
or you have a savings plan
and that savings plan is depleted
now you incurring those costs that you have to pay
and one tip I always give all our taxpayers
please even if you're on a hospital plan
submit your medical invoices to your medical plan
cause it
the medical fund puts it onto your tax certificate
and SAZ accepts that information
you don't have to do it at the end of the tax year
it's quicker and much easier to do that way
if you go to the doctor come out the doctor
submit it to the medical aid
it then appears on your tax certificate
you don't need to do anything from a sales perspective
yes okay
but there are sometimes where you don't
and this is where we have to be careful
to make sure that those costs that you did not submit
you actually include them in your tax return
but now you have to include them
the invoice
plus the bank statement showing the proof of payment
or the actual proof of payment itself
before SARS will allow that
yes today I wanna just talk about um
disability into from a SARS perspective
because there are
additional savings that people mostly are not aware of
okay
and what is regarded as as disability according to SARS
it's a different definition so one SARS
has various categories of disabilities
so they'll talk about a physical disability
this might be an amputation
a loss of limb uh
that there might be a situation where it's a sensory
disability uh
a person could be uh
fully blind or partially blind or have severe
in a severe hearing impairment okay
is it only applicable to a taxpayer
or to his dependents no so this if even if uh
the taxpayer is the primary member
yes but if he has
one child or one dependent that has the disability
then that disability applies to the
to the taxpayer
and he can claim the disability on his total expenses
okay so there
and there are other ones as well
and I just wanna go through these to make sure
I don't miss out
cause it's important that people understand
one is a is a
they also talk about a speech and communication
disability yes
they talk about an intellectual and development
disability this could be all autism
children with autism or a family member with autism
they talk about in terms of mental disorders
could be severe depression bipolar
yes
so there's lots of areas that fall into the disability
yes and what is not regarded as a disability
according to SARS if it's a
if it's a temporary condition that can be cured
with medicine with medicine
no this is more of a medium to long term illness
etcetera but the
the interesting thing is that when you look at this now
on the on the disability side
um SARS will allow additional
additional expenses yes
so normally your medical devices
that's all medical but if you have a child with autism
and they need additional coaching or they need a
a teacher assistant in the classroom
or they need a tutor
those salaries you can claim for the tutor
if your child needs to go to a
a school that that
that's geared to help a a special needs child
you can claim the difference between the public school
and and the new school
so if there's a difference of say
8 or 9,000 rand a month in medic
in school cost
you can claim that difference in your claim
so it racks up quite nicely and
and with the disability as well
there's a complicated formula by size
but at the end of the day
it's basically a third
so if you incurring additional costs of say
100,000 rand schooling transportation
teacher assistant etcetera etcetera
those cost rack up you basically get back
for every rand you spend you get back 33 cents
so if it's 100,000 rand
you're gonna get a reduction on your taxes
of 33,000 rand yes
it's a big deduction
and I honestly don't think that a lot of people are
are valuing themselves of this deduction
that's available to them and they should
they're leaving money on the table
yes and SAZ is not saying anything
they don't they don't really highlight this
this benefit and people need to use this benefit
because they're incurring these costs
and they need to be compensated for these costs
okay and what do
it's important that the
they talk Charles talks about an IRT RDD4 yes
and this is a document
that's gotta be signed by a specialist okay
so typically not always your GP
it's someone a specialist in hearing or autism
and you go for assessment
they sign it off once you have that document
SARS accept it okay
once it's signed off by a specialist
SARS will not query it
because it's been signed by a professional
senior medical practitioner okay
and back on the medical tax credit uh
the rates for this year runs from 300 and
and 64 for a main member and the spouse
and then 246 rand for the dependents per month yes
and that amount is multiplied by 12 months
to give you a rebate on your m t C yes
and then as I said earlier
your your rebate on your a t m
C is basically if you have a disability
it's 1/3 of your cost yes
it's worth it it's more than that
yes that's it for today
thank you for tuning in to the Rev Room
and we look forward to seeing you again