As announced in last year’s budget, income tax deductions for medical scheme contributions for taxpayers below 65 years will be converted into such credits. Monthly tax credits will be increased from R216 to R230 for the first two beneficiaries and from R144 to R154for each additional beneficiary with effect from 1 March 2012.
It is enough of a struggle to have a handicapped child, particularly where that child requires significant medical support, well in excess of any normal level of expenditure. In the past, these costs have been fully tax deductible, which has made caring for the child more affordable. From 1 March 2014, expenses relating to a handicapped will no longer be deductible but to the extent that expenses exceed three times the total allowable tax credits will be converted to a tax credit of 33,3%. For a higher rate payer with medical costs of R100,000 per annum, the credit will be R16 740 as opposed to the tax value of the deduction of R40,000. This will come as a severe blow to those providing medical care to their handicapped loved ones and unfortunately may affect the quality of the care that can be afforded.
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