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Medical Aid Schemes – Late Joiner Penalties

Medical Aid

Medical Aid Schemes – Late Joiner Penalties

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What is a Late Joiner Penalty?

Late joiner penalties were introduced to protect medical schemes from people who wait until they are sick or older to join. Their introduction therefore encourages people to join the scheme while still young and healthy.

Late joiner penalties apply to people who are 35 years of age or older and have had no medical aid cover, or have had a break in membership either as a main member or dependant. Any previous medical aid cover is known as creditable coverage.

Note: Creditable coverage only includes cover as a dependant after the age of 21. Any cover before that is not considered for purposes of the late joiner penalty in respect of dependants.

Late joiner penalties only apply to the contribution related to the person to whom the penalty is applicable. It is not applied on the total contribution payable to the medical scheme.

What will my penalty be?

The formula for determining the late joiner penalty is:

A=B-(35+C) where:

A is the penalty band that will be applicable as per the table below.

B is the age of the member at the time of their application to the medical scheme

C is the number of years of creditable coverage as explained above.

The maximum penalty that can be applied to a contribution is:

AAddition to your contribution
1-4 years Contribution X 0.05
5-14 years Contribution x 0.25
15-24 years Contribution x 0.5
25 years and above Contribution x 0.75

Lets give an example:

You are 42 years of age at the time of application to the medical scheme. You have not been a member of any medical aid since you were 30 years of age. The total number of years you have belonged to a medical aid (after age 21) is 5 years.

The penalty applicable will be:



From the table above, you will have a 0.05 x Contribution penalty added to your contribution.


Shameer Chothia is currently an Employee Benefits Consultant at Momentum Consultant and Actuaries. He is the chairman of the Rhine Stone Body Corporate and the Founder and Head Financial Coach at LMS Financial Coaching. Shameer is deeply passionate about financial literacy and education. He truly believes that there is duty to empower people with education, which makes a difference in their everyday lives. To achieve this, he founded LMS, actively changing lives by empowering people with financial knowledge

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