Public Service and Administration on increase to subsidy for employees on registered medical schemes

DPSA Director-General announces increase to subsidy for employees on the GEMS and all former employees belonging to registered medical schemes

The Director-General of the Department of Public Service and Administration, Ms Yoliswa Makhasi is pleased to announce the adjustment of employer medical assistance for employees on the Government Employees Medical Scheme (GEMS) as well as all former employees belonging to a registered medical scheme by Medical Price Index (MPI) of 8.51 percent with effect from 1 January 2021.

“The increase in the subsidy will go a long way in cushioning the recent increase on medical aid contributions for both current and former public servants which comes about as the country experiences tough economic conditions,” said Ms Makhasi.

Public Service Co-ordinating Bargaining Council (PSCBC) Resolution 2 of 2015 provides for the adjustment of future medical subsidy for employees who are members of the GEMS and all former employees (pensioners) belonging to GEMS and other open schemes using the MPI which is the Consumer Price Index (CPI) used in the health industry.

In terms of PSCBC Resolution, the employer subsidy for employees on GEMS will be adjusted annually in January of each year with the average annual MPI for a particular year starting from September of the particular year to August of the following year.

An employee belonging to or joining GEMS shall be eligible for 75% of his or her total monthly medical contribution up to the maximum employer subsidy, based on the number of dependents registered.

A former employee belonging to a registered medical scheme shall be eligible for 75% of his or her total monthly medical contribution up to the maximum subsidy.

Public service employees on salary level 1, 2, 3, 4 or 5 belonging to or joining GEMS on the Tanzanite One option (formerly Sapphire Option) are eligible for 100% of total monthly medical contribution, up to the maximum employer subsidy, provided the subsidy amount does not exceed the employee’s total monthly contribution to GEMS.

The maximum cap of the employee’s tax allowance, comprising of the monthly cap of R1 526-00 for principal member, R1 526-00 for the first dependant and R933-00 for each additional three (3) dependants will be R5 851-00.

Table 1: Employer subsidy for in-service employees effective from 1 January 2021.

For more information please contact:

Dumisani Nkwamba - Departmental Spokesperson
Cell: 082 885 9448
E-mail: dumisani.nkwamba@dpsa.gov.za