If you are blindly copying the “claims not recovered” total from your medical aid certificate onto your tax return, you are waving a red flag at SARS. Understatement penalties can reach 200%, making it critical to know if your documentation will actually survive a legal audit.
SARS frequently disallows out-of-pocket medical expenses because taxpayers mistake “unrecovered medical aid claims” for actual proof of payment.
Under Section 6B(4) of the Income Tax Act, you can only claim medical expenses that you have personally paid and settled out of your own pocket. To protect your claim from a SARS rejection, you must understand the strict rules of evidence required by law.
The Medical Aid Statement Trap
Many taxpayers look at their end-of-year tax certificate and see a line item that reads something like:
“Claims not recovered from the scheme: R18,000.00”
- The Reality: This phrase is not proof of payment.
- The Meaning: It simply means your medical aid did not cover that specific amount.
- The Risk: If you claim this number without supporting documents, SARS will disallow it.
Meeting the Legal Burden of Proof
Section 102 of the Tax Administration Act places the entire burden of proof onto you, the taxpayer. To successfully claim additional medical expenses, you must prove the money actually left your account.
SARS will only accept tangible, credible proof of payment, which includes:
- Supplier Receipts: Invoices stamped or marked “paid” by the doctor, hospital, or pharmacy.
- Bank Statements: Clear line items showing the electronic fund transfer (EFT) to the medical supplier.
- Credit Card Statements: Transaction records showing the payment settlement.
Without these matching documents, your out-of-pocket claims will be rejected during a SARS audit.
Let Consulting Cave Handle Your Claims
Calculating, tracking, and proving medical expenses can be an administrative nightmare.
Contact Consulting Cave today. Let our team take away the anxiety of reviewing and compiling your out-of-pocket claims. Together, we will ensure your documentation is fully compliant so you can avoid a costly SARS disallowance.