At present, a taxpayer responsible for contributing to the medical scheme of another person is allowed as a rebate a fixed, monthly amount determined by the Minister. The Budget states that in the 2019 year of assessment, this fixed amount will increase from R303 to R310 per month for the first two beneficiaries of the medical scheme, and from R204 to R209 per month for each of the remaining beneficiaries. Where additional expenses are incurred on another’s behalf, an amount calculated in terms of the provisions of s6B will be allowed as a medical tax credit.  

In the Budget, the concern is raised that taxpayers are excessively benefitting from these rebates where multiple taxpayers contribute to the medical scheme fees or other medical expenses of a third party (for example, adult children jointly contributing to their elderly mother’s medical scheme). To prevent this excessive benefit, it has been proposed that where taxpayers carry a share of the medical scheme contribution or medical cost, the medical tax credit be apportioned between the various contributors.