Govt pushing ahead with plan to scrap medical aid tax credits to help fund NHI

PL

Paula Luckhoff

14 October 2025 | 18:05

The Health Department has confirmed plans to phase out R34 billion (annual figure) in medical tax credits to support the National Health Insurance fund.

Govt pushing ahead with plan to scrap medical aid tax credits to help fund NHI

Image: Tung Nguyen on Pixabay

Dr. Nicholas Crisp, a deputy director-general in the National Department of Health, has confirmed that the tax rebate for medical aid credits - around R34 billion a year, will eventually be redirected to fund National Health Insurance (NHI).

He spoke during the presentation of the Health Department’s 2024/25 annual report in Parliament.

Critics have pointed out that millions of South Africans face the possibility of being unable to afford private medical aid, if the plan goes ahead.

RELATED: Scrapping medical aid tax credit could push millions into public healthcare - expert

The Medical Scheme Fees Tax Credit (MTC) applies to a taxpayer's contributions to a medical scheme, reducing the amount of tax the individual pays.

While the individual rebate is limited, it will affect affordability for people in the middle- andlower-income bracket says Craig Comrie, CEO of the Profmed Medical Aid scheme.

"When Prof. Crisp says that it is only going to impact the higher earners, I don't know how you're going to differentiate them because for instance, people with disabilities and pensioners are the ones that tend to also benefit from the additional medical tax credits that are available. So it really is something that should be carefully unpacked."

Crisp told Parliament that there have been discussions with the National Treasury about this.

Once health services are paid for by the NHI fund, this rebate would mean double funding for the government and it would serve no purpose to allow that money to be paid back when it’s already covering services under the NHI, he said.

While not many details are available, Crisp emphasised that the transition will be gradual, with the intent to implement changes without collapsing the current services.

'The phasing out of the medical aid tax credit will happen systematically... Various thresholds for qualifying for the tax credit could be introduced over time', he explained.

One of the main criticisms of South Africa's proposed universal healthcare system is that funding the NHI would be unsustainable, as Comrie echoes.

"Like many things with NHI, the biggest concern is that you cannot finance what is set to be a trillion-rand-a-year NHI fund by taking R34 billion from those who actually spend money on taking care of themselves."

To listen to Profmed's Craig Comrie in conversation with Stephen Grootes on 702's The Money Show, click on the audio link below:

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