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Claiming Disability Expenses

Shared by Anwar Abdurahman CA (SA) – Profac Accounting.

Did you know that if you, your spouse or a dependent has a disability, you can claim certain qualifying medical expenses as a deduction? The key criterion is diagnosis by a qualified medical professional of a moderate to severe limitation of a person’s ability to function or perform daily activities.

The claim is made via an ITR-DD form (see below for details).

What are the Tax Benefits?

  • You can claim 33.3% of qualifying out-of-pocket medical expenses (including disability-related expenses) paid by you (and not recoverable) during the relevant year of assessment.
  • You can also claim 33.3% of any fees paid to a registered medical scheme or qualifying foreign fund, as exceeds three times the amount of the medical scheme fees tax credit to which you’re entitled.

Here are some useful tips on how to take full advantage of the benefit:

1. Complete the ITR-DD Form

If you or your dependents have a mental, hearing, visual, communication, intellectual or physical impairment, you should qualify for tax relief in respect of your medical and impairment-related expenses. SARS requires the ITR-DD form. It must be completed by a registered medical practitioner qualified to confirm the relevant diagnosis.

Be sure that the medical practitioner places their practice stamp where indicated. The form is valid for 10 years if the disability is considered permanent. 

2. Expenses You can Claim

SARS prescribes a list of physical impairment or disability expenses that can be claimed in addition to other qualifying medical expenses. See the SARS website for the list: Qualifying Physical Impairment or Disability Expenditure.

A listed expense does not automatically qualify as an expense. To qualify, it must be necessary for the alleviation of the restriction on a person’s ability to perform functions of daily living. The taxpayer is responsible for justifying all amounts claimed

Common Costs that are Claimable

  • School Fees –  amount in excess of the fees charged by the closest public school.
  • Therapist Fees – including speech, occupational therapy, physiotherapy, etc.
  • Travel Costs – for travel between home and school.
  • Care Fees – personal care attendant expenses.
  • Equipment Costs – including aids and other devices.

3. Supporting Documents

It’s likely that your Income Tax return will be flagged for audit by SARS as a result of such claim. You’ll be requested to provide supporting documents. These will include a schedule of expenditure, invoices and proof of payments.

4. Who Should Claim?

An expense can only be claimed by one taxpayer. Should the medical and disability-related expenses be handled through your tax return or your spouse’s? What happens if you’re divorced? What if you pay for medical aid, but your partner pays expenses such as special needs school fees, speech therapy and OT?

If you have not taken some of these into consideration in previous tax submissions, it’s possible to have a previous period re-assessed by SARS.

To ensure the most tax efficient solution and maximum tax relief, you may need to consult an expert. Disability tax law is complex.

Need Some Help?

Profac Accounting has served Mindstretch with professional tax expertise and great care and attention for several years. Consider having Profac help you get maximum tax relief, particularly in these current challenging circumstances.

Increased fees for special education schools for learners with disabilities are tax deductible.

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