Glossary

Above Threshold Benefit

Day-to-day cover on Comprehensive plans that resumes after you've crossed the Annual Threshold.

The yearly spending point at which Above Threshold Benefit kicks in on a Comprehensive plan.

Home Loan

South African term for a home loan secured by a mortgage over the property. Registered at the Deeds Office; usually a 20-year variable-rate loan at prime + a margin.

Capital Gains Tax

Tax on the profit from selling an asset, included in your taxable income at an inclusion rate of 40% for individuals. Your primary residence has a R2m exclusion.

Chronic Disease List

27 chronic conditions every medical scheme must cover in full, including ongoing medication, for life.

A fixed amount you pay out-of-pocket toward a medical treatment, before scheme cover applies.

Top-tier plan with an MSA plus day-to-day cover that continues after the MSA runs out.

Council for Medical Schemes

The statutory regulator of all medical schemes in South Africa.

Out-of-hospital medical cover (GP visits, scripts, dental, optometry), funded by MSA or risk pool.

Designated Service Provider

The specific hospitals, doctors, or pharmacies your scheme contracts with; using them avoids co-payments.

DWT

A 20% withholding tax on dividends paid by SA companies to shareholders. Deducted at source by the company or its regulated intermediary — most retail investors never file for it.

Total tax owed divided by total taxable income — the average rate paid across all brackets. Always lower than the marginal rate for income above the threshold.

Financial Advisory and Intermediary Services Act

The law that regulates anyone giving advice or selling medical aid in South Africa.

A list of approved medications a medical scheme will cover at full benefit, typically generics and lower-cost brands.

Short-term insurance that covers the difference between scheme rate and what specialists actually charge.

A daily cash payout when you're admitted to hospital. Not medical aid.

The cheapest type of medical aid: covers in-hospital costs only, no GP visits or day-to-day medication.

Your monthly contribution is determined by your income, not just your plan choice.

The annual amount of local interest income that’s tax-free for individuals. R23,800 for under-65s, R34,500 for 65 and older (2026/2027 — unchanged for several years).

The annual employee tax certificate. Summarises gross pay, allowances, deductions, and PAYE/UIF/SDL withheld for the tax year — the input to your ITR12.

The annual income tax return for individuals. Filed via eFiling (or accepted as auto-assessed) for the tax year ending 28 or 29 February.

A permanent surcharge on your medical aid contribution if you join a scheme after age 35 without prior cover.

The tax rate applied to the next rand of taxable income — the bracket your income tops out in. Different from the effective rate, which is the average across all brackets.

Medical aid cover for pregnancy, birth, and post-birth care, varying dramatically between plan tiers.

The process by which a scheme assesses your application, but cannot refuse you for being sick.

They sound the same but they're legally different products with very different cover.

Medical Savings Account

Your personal medical pocket money, funded from your contribution and spent on day-to-day costs.

A non-profit fund that pools members' contributions and pays their healthcare claims.

Medical Schemes Act 131 of 1998

The legislation that governs medical schemes, including PMBs, solvency, and member rights.

Medical aid cover for mental illness, included as a PMB but with practical limits to navigate.

National Credit Act

The 2005 statute that governs all consumer credit in South Africa. Codifies affordability assessments, plain-language disclosure, debt review, the in duplum rule, and reckless-credit relief.

You only get full cover if you use a defined list of hospitals, doctors, and pharmacies.

Medical aid cover for cancer diagnosis and treatment. Every scheme covers PMB cancer; better plans cover more.

Cover for the newest, most expensive cancer drugs, with significant member co-payments.

Open schemes accept anyone. Closed (restricted) schemes only accept specific employees or members.

Pay As You Earn

Income tax that an employer withholds from each salary payment and remits to SARS on the employee’s behalf. A pre-payment of the annual income tax bill.

Approval you must obtain before certain medical treatments; not getting it can mean partial or no cover.

Prescribed Minimum Benefits

271 medical conditions and 27 chronic illnesses every scheme must cover by law, even on the cheapest plan.

Limited day-to-day cover for GP visits and basic medication, usually employer-provided.

The benchmark lending rate banks charge their best clients, used as the base for most variable-rate loans and bonds. Set as repo rate + 3.5 percentage points by convention.

A pre-payment system for taxpayers with non-salary income (business, rental, freelance, investment). Two compulsory payments per year, plus an optional third "top-up".

The interest rate the SARB charges banks for short-term loans. The lever the central bank uses to manage inflation; sets the floor under prime and most lending rates.

RA

A tax-deductible private retirement vehicle. Contributions are deductible up to 27.5% of taxable income (max R350,000/year). Locked until age 55 except in narrow cases.

The portion of your medical aid contribution that goes into the shared scheme pool, not your personal account.

South African Revenue Service

The national tax authority that collects income tax, VAT, customs duties, and excise levies, and administers the Tax Administration Act on behalf of the South African government.

A hospital plan plus a Medical Savings Account (MSA) for day-to-day expenses.

Small Business Corporation

A qualifying private company taxed under section 12E at progressive rates that are markedly lower than the standard 27% corporate rate. Strict eligibility tests apply.

The price a medical scheme is willing to pay for a medical service; doctors don't have to charge that.

Skills Development Levy

A 1% employer-only payroll levy that funds workplace training through the SETAs. Employers with annual payroll under R500,000 are exempt.

Self-Payment Gap

The amount you must self-fund after your MSA runs out and before Above Threshold Benefit kicks in.

How much money a scheme holds in reserve, expressed as a % of annual contributions.

The percentage of scheme rate at which your plan reimburses specialists in hospital.

A flat rand amount subtracted directly from the tax owed (not from taxable income). Three age-based rebates apply automatically: primary, secondary (65+), and tertiary (75+).

The annual income below which no income tax is owed, after rebates. R99,000 for under-65s, R153,250 for 65–74, and R171,300 for 75+ in 2026/2027.

The income figure SARS taxes — gross income minus exempt income and allowable deductions. The base for the bracket calculation, not the same as gross or net pay.

Tax-Free Savings Account

A registered investment account where all returns (interest, dividends, capital gains) are tax-free. Contribution limits: R46,000/year and R500,000 lifetime.

A tax paid by the buyer on the purchase of immovable property, on a sliding scale. Properties under R1.21 million are exempt; the top bracket is 13%.

The 2024 reform of retirement funds. New contributions split 1/3 to a savings pot (withdrawable annually) and 2/3 to a retirement pot (locked until retirement).

Unemployment Insurance Fund

Statutory short-term income protection funded by a 1% employer + 1% employee levy on remuneration up to a monthly cap. Pays out for unemployment, illness, maternity, and adoption leave.

Value-Added Tax

A 15% consumption tax SARS levies on most goods and services. Vendors with annual turnover above R1 million must register; below that, registration is voluntary from R50,000 of sales.

A delay before some or all medical aid benefits become available when you join a scheme.