Health Funders Association welcomes the increase in medical scheme tax credits

The Health Funders Association (HFA), representing medical schemes covering more than 45% of South Africa’s medical scheme beneficiaries, welcomes Finance Minister Enoch Godongwana’s confirmation in today’s Budget Speech that medical scheme tax credits will increase by 3.3%.

HFA views this as an important acknowledgement by government of the critical role that medical scheme tax credits play in supporting working South Africans who contribute towards their own healthcare cover.

The majority of medical scheme members are not high-income earners. Approximately 83% earn less than R37,500 per month, while 44% earn below R16,500 per month. These are teachers, nurses, retail workers, call centre agents and other blue-collar employees who form the backbone of South Africa’s economy and who rely on medical scheme cover to protect themselves and their families from unpredictable healthcare costs.

Medical scheme tax credits remain one of the most effective policy tools to support access to healthcare while maintaining system stability, and this increase will improve the affordability of private healthcare for working households.

By helping working families afford private healthcare cover, tax credits:

• assist and sustain medical scheme membership,
• reduce pressure on an already constrained public health sector, and
• contribute to a balanced and sustainable healthcare financing system that benefits both individuals and the state.

Internationally, similar mechanisms are widely used in countries such as Australia, Canada, Ireland and the United States, where governments actively support private health coverage as part of mixed health financing models aimed at improving access and achieving universal health coverage.

In South Africa, medical scheme tax credits have not been increased since 2022 and their real value has steadily declined due to inflation, placing growing pressure on household affordability. For many families, these tax credits represent the difference between maintaining their medical scheme membership and being forced to rely on an already overburdened public health sector.

“Medical tax credits help preserve access to healthcare, protect household finances and support the sustainability of South Africa’s entire health system,” said HFA CEO, Thoneshan Naidoo.

HFA notes that maintaining and strengthening mechanisms that support healthcare affordability will remain essential as South Africa continues its journey toward universal health coverage.

“At a time when households face increasing financial pressure, increased medical scheme tax credits helps keep healthcare within reach for working families,” said Naidoo. “Protecting affordability today is critical to ensuring stability in the health system as South Africa advances toward universal health coverage.”