Tax Guide for parents caring for a child with disabilities
The tax relief available in respect of medical and “disability” related expenditure stems from tax laws and SARS practices that have been amended and changed on a regular basis in past years. During this time, there have been changes to the way in which one confirms the diagnosis of a “disability” for tax purposes, the expenditure items that may be taken into account, the limitations that need to be applied to certain expenses, and the progressive change from a tax deduction system to a tax credit system. Many parents have already obtained substantial tax refunds; many more parents continue to receive tax refunds on a regular basis.
- What is the relevance to me as a parent of a pupil in tax terms? A mainstream school that is also catering to learners with special learning needs, it is possible that all medical expenses incurred by you could be taken into account for tax purposes, including fees paid to your school; subject to limitations.
- Who qualifies for this tax relief? If your son or daughter has a limitation on their ability to perform daily activities and such limitation falls within the definition of a “disability”, as defined for tax purposes, then all medical and “disability” expenses should be able to be taken into account for tax purposes; subject to limitations.
- What is the definition of a “disability”? The definition of a “disability” is set out in the Income Tax Act and means “a moderate to severe limitation of a person’s ability to function or perform daily activities as a result of a physical, sensory, communication, intellectual or mental impairment, if : (a) the limitation has lasted or has a prognosis of lasting more than a year, and (b) is diagnosed by a duly registered medical practitioner in accordance with criteria prescribed by the Commissioner (i.e. SARS)
- How do I know if my son or daughter has a “disability”? If you have been referred to a registered medical practitioner and have received a formal diagnosis, you will know whether he/she has a disability.
- Does that automatically mean that my son or daughter falls within the definition set out above, in accordance with the criteria prescribed by SARS? No. SARS has issued a form “Confirmation of Diagnosis of Disability” (form ITR-DD).
- 6. What do I need to do with the ITR-DD form? The form must be completed by the parent and a duly qualified medical practitioner. If your medical practitioner confirms that your son or daughter does have a “disability”, the form should be retained by you before submitting your tax return. It does not need to be submitted with your return but retained in case SARS requests it.
- Will my doctor, psychologist, therapist, etc. be comfortable completing and signing the relevant sections of the ITR-DD? In order for your son or daughter to have a “disability” as defined in tax law, it is a requirement in our law that the form is completed by the appropriate health practitioner.
- Does the form need to be completed for every tax year? If your duly registered health care practitioner completes the form and confirms therein that your son or daughter’s “disability” is of a permanent nature, then you only need to obtain the form every ten years.
- What happens if my health care practitioner does not consider the “disability” to be of permanent nature? You will need to get the form duly completed every tax year.
- Can I request a tax certificate from our child’s special school? Most Special schools will issue a tax certificate on request. This will reflect the school and other fees paid for your child’s special needs education during the applicable tax year.
- What do I do with this tax certificate? As noted above, if you obtain the ITR-DD then all your medical and “disability” expenses should be able to be taken into account for tax purposes (subject to limitations), which is likely to include your Special School fees. The certificate should, therefore, be used as part of the calculations required to be performed prior to submitting your tax return.
- What do fees paid to a Special School have to do with medical expenses? Tax law is complex and medical expenses do not just include your medical aid contributions and your share of claims not paid by your medical scheme (you should receive a separate tax certificate from your medical scheme reflecting these figures). Other expenses which may be allowable as “medical expenses” include expenses relating to your son or daughter’s “disability” – that is the connection between the Special School fees and medical expenses as in the absence of any “disability”, your son or daughter would not need the specialized care and attention that they get at a Special School.
- Could there be other expenses that could also be deductible as a result of my son or daughter’s “disability”? Yes, but that would depend entirely on your own facts and circumstances and what expenses you have paid in relation to the “disability”. Specialist tax advice is recommended to ensure that your claim is maximized in accordance with the law and therefore pays less tax. You should contact Let us Assist regarding this, at info@letusassist.co.za .
- What can be done if I did not claim all my medical expenses in previous years? If you qualified to receive the applicable tax relief in previous years but you did not take “disability” into account when attending to your tax matters, it is possible that you could be able to re-visit those prior years.
- How far back can I go in re-opening the previous year’s tax returns? This is dependent on your unique circumstances.
- How do I go about re-opening previous tax years? Specialist tax law advice is recommended and will probably be money well spent as the refunds can be considerable if all claims have not been made for the previous years.
Send this completed form
for a FREE assessment
of what we can claim for you
Additional information The information below is applicable in respect of the 2020 tax year. The tax law in respect of medical and “disability” expenses changes from year-to-year and thus the information outlined below may not be applicable to the current tax year. Because of the complexities, you are advised to seek professional assistance.
There is no definitive list of expenses that would qualify under point 3 for tax purposes. Each case needs to be based on its merits, facts and circumstances and specialist tax law advice is recommended to ensure that the maximum expenses are claimed as deductions and that the claims should be allowable. Notwithstanding the fact that specialist advice is recommended, the following examples of expenses are of relevance: • Special School Fees, if your child was formally diagnosed with a “disability” by a registered medical practitioner; • Travel expenses for your child with a “disability” to and from the Special School; • Attendant care costs required to look after your child with a “disability”; • Aftercare costs, au pairs specifically used to attend to your child with a “disability”; • Facilitator and/or private tutor fees; • Extra lessons; • Special educational toys; • Costs of alterations or modifications to your assets incurred and required as a consequence of your child’s “disability”; • Specialized therapies; • Horse riding and/or other interventions which may be considered necessary for therapeutic reasons. The above list is not exhaustive and there may be several other items of expenditure which may be claimable as deductions. It is recommended that all receipts, irrespective of whether you think the expense may be deductible or not should be retained by you. Let us Assist will then be able to advise on what amounts should be claimed and in any event, SARS are in all probability likely to request receipts to support your claim for deductions.
The items listed above should not be read as a guarantee that the expenses will be allowable, although experience shows that in most cases they are. However, each case will depend on its own merits. Your tax law advisor can advise you on the extent to which the above expenditure items and your medical aid contributions translate to a tax refund. If expenditure items are claimed which are not allowable or if the correct limitations are not applied, SARS could, in addition to not allowing such overstatement, levy penalties for overstating your tax relief. Accordingly, it is advisable that you seek specialist tax advice to ensure that you are receiving the maximum tax relief available to you, within the confines of the applicable tax legislation. If you would like, you can contact info@letusassist.co.za or visit www.letusassist.co.za for more information.
Disclaimer The guide is just that - a guide. We, however acting on your behalf, will make every endeavour to claim the maximum possible refund from SARS by observing and abiding by SARS tax laws
SARS statistics that many parents of special needs children are either not claiming tax relief from SARS or not claiming as much as they could.
