Many taxpayers in South Africa are unaware of the valuable tax relief available for those supporting disabled dependants. Properly claiming these deductions can reduce expenses related to care, helping families manage the additional costs associated with providing care for individuals with disabilities.
Taxpayers who have dependants with disabilities are eligible to claim additional tax deductions under specific conditions. These deductions can include the costs of medical expenses, special care, and related services. However, to ensure that taxpayers fully benefit from these provisions, it is essential to understand the guidelines laid out by the South African Revenue Service (Sars).
Danielle Luwes, tax manager at Hobbs Sinclair Advisory, provides a guide to understanding and claiming these deductions under Sars regulations.
Eligibility criteria
To qualify, a dependent must meet Sars definition of disability, which encompasses any "moderate to severe limitation" in performing daily activities. This includes physical, mental, intellectual, or sensory impairments, such as autism, Asperger’s syndrome, and other long-term conditions that substantially impact daily functioning. Conditions like autism or Asperger’s syndrome qualify if they meet Sars’s standard for "moderate to severe" limitation.
Deduction rates
While most taxpayers can only claim 25% of medical expenses that exceed 7.5% of taxable income, those supporting disabled dependants are eligible to claim 33% of all qualifying expenses without meeting an income threshold. This additional relief applies to a broad scope of costs, including medical aids, therapies, and specialised care or schooling.
Eligible expenses
- The tax deduction applies to a variety of essential costs, including:
- Specialised schooling and therapies (e.g., speech and occupational therapy)
- Medical equipment, aids, and caregiver fees
- Transport costs exceeding 10km for accessing special needs schooling
- School fees for dependants attending special needs institutions, up to the cost of the nearest public school without special provisions
- However, school fees that exceed those of the nearest public school may require additional justification, especially if they surpass basic tuition costs.
Documentation required
To apply for the rebate, taxpayers need to submit specific documentation, including a Sars-recognised medical certificate (ITR-DD) verifying the disability, receipts for all qualifying expenses, and any other supporting documents required by Sars. Claimants are encouraged to review any yearly updates in documentation standards as Sars occasionally updates its guidelines for acceptable documentation.
Filing process
Taxpayers should submit all deductions through Sars’s eFiling system or other relevant forms. Luwes stresses the importance of careful documentation, as all expenses must be substantiated to ensure claims are accepted.
Due to the complexity of disability tax relief, taxpayers are advised to consult with a tax professional to maximise their benefits and avoid missteps in the process.
“It’s crucial for taxpayers with disabled dependants to be proactive in understanding their rights and the benefits available to them,” says Luwes. “The tax deductions can significantly ease financial pressure, but thorough documentation and adherence to Sars regulations are key to a successful claim.”
PERSONAL FINANCE