Tax deductions for disability: Retroactive change relating to school fees

Expenditure prescribed by SARS and which is necessarily incurred and paid for by a taxpayer due to a physical impairment or disability is a qualifying medical expense for tax purposes. Taxers incurring such expenses can obtain a tax benefit.

An expense does not automatically qualify as a deduction by mere reason of its listing in a SARS document. To qualify for the tax deduction, the expense must be necessary to alleviate the restriction on a person’s ability to perform functions of daily living. For example, if a person in a wheelchair who has no visual impairment buys a hand-held GPS, the cost of the hand-held GPS will not qualify as a deduction even though the expense appears on the list. This is because the hand-held GPS is not directly connected to this person’s disability. In the case of a visually impaired person, the cost of the hand-held GPS may qualify as a deduction.

SARS is permitted by law to publish a list of qualifying medical expenses that are necessarily incurred and paid by a person during a year of assessment due to any physical impairment or disability suffered by the person or any dependant of the person (“Disability List”). The Disability List was updated after an extended public consultation process and published from 1 March 2020 (“the 2020 Disability List”). From the latter part of 2020, SARS noted public concerns regarding the change in calculating the qualifying medical expenses relating to school fees.

For this reason, and after much deliberation, SARS has decided to revert to the method of calculating the qualifying medical expenses for school fees as set out in the 2012 Disability List. This change will be effective retrospectively from 1 March 2020.

The allowable deduction now includes:

Special education schools for learners with disabilities

Qualifying expenses will include school assistant or classroom costs and school fees (but these are limited to the excess amount that would have been payable if the person attended the closest fee-paying public school not specialising in learners with special educational needs).

Schools not specialising in learners with special educational needs

The quantum is limited to additional expenses incurred and paid as a result of the disability.

Affected taxpayers who have already submitted a 2021 income tax return are requested to log into their eFiling profile or visit their local SARS branch office to:

• request for correction; or
• lodge an objection.

Contact your tax adviser for more info.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)