Picture: ISTOCK
Picture: ISTOCK

Covering the full cost of study, even for the minority of university students who qualify for aid from the National Student Financial Aid Scheme (NSFAS), would require an additional R10.7bn for the 2018 academic year, says the Treasury.

The government has yet to decide whether to scrap university fees. President Jacob Zuma received the final report of a commission he established to look into fees, but has not made it public.

In 2016, NSFAS provided financial assistance to 225,950 university students from families with income of less than R122,000 a year, helping 30% of university students cover some of their costs. The Treasury said on Wednesday that it was working with universities to verify the number of students from middle-income households who might qualify for support if the income threshold was adjusted upwards.

Paying for the full cost of study for 75% of undergraduates would create a shortfall of R40.7bn in 2018, or R138.9bn over the next three years.

The Treasury also drew attention to the funding gap for students attending technical and vocational education and training colleges. It said that covering the full cost of study for all of them would require R23.5bn over the next three years — over and above the R40bn already earmarked for this.

Treasury also published figures illustrating the effect of the medical tax credit scheme.

It said that it wanted advice from the Davis tax committee on the feasibility of adjusting these credits to finance a National Health Insurance fund.

Former finance minister Pravin Gordhan said in presenting the budget in February that a National Health Insurance fund would be established to support priority health programmes and that it might be funded partially by a reduction in the tax credits provided to medical scheme members.

The Treasury said on Wednesday that more work needed to be done and published an analysis showing more than half (56%) the total credits claimed in 2014-15 accrued to 1.9-million taxpayers with a taxable income below R300,000.

"Tax data indicates the programme is well targeted to lower-and middle-income taxpayers," the medium-term budget policy statement said. The figures indicated that scrapping or sharply reducing the medical tax credits would hit people on lower incomes particularly hard and potentially make their medical scheme cover unaffordable.

Medical tax credits are given primarily for medical scheme membership, but people can also claim a tax credit for additional medical expenses that they pay out of pocket.

kahnt@businesslive.co.za

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