Late Joiner Penalties on Medical Schemes: The Formula, and Why It Is Permanent
There are two different things a medical scheme can do to you when you join, and South Africans mix them up constantly.
A waiting period is temporary. It delays your access to benefits for a few months and then it is over.
A late joiner penalty is permanent. It adds a percentage to your contribution — up to 75% — and it does not fall away after a year, or five years, or twenty. It follows you when you change schemes. There is no appeal to good behaviour, no reduction for staying healthy, and no expiry date.
It is set by Regulation 13 of the Medical Schemes Act, it runs off a formula, and the single variable you control is how many years of past cover you can prove on the day you apply.
Who counts as a late joiner
Regulation 11 defines it, and the definition is narrower than the version circulating on broker websites:
"late joiner" means an applicant or the adult dependant of an applicant who, at the date of application for membership or admission as a dependant, is 35 years of age or older, but excludes any beneficiary who enjoyed coverage with one or more medical schemes as from a date preceding 1 April 2001, without a break in coverage exceeding three consecutive months since 1 April 2001.
Two things fall out of that.
The trigger is age, not a gap. You do not have to have been uninsured for any particular period. If you are 35 or older on the date you apply, you are in scope — and then the formula decides whether you actually pay anything.
There is a grandfathering clause, and it is generous. If you have been on a medical scheme since before 1 April 2001 and have never had a break of more than three consecutive months since then, you are excluded from the definition entirely. Not penalised at a low band — excluded. That is a genuine reward for uninterrupted membership across a quarter of a century, and it is why long-standing members who change schemes in their fifties are not penalised.
You will read, in a lot of places, that a late joiner is someone who "has not been a member of any medical scheme for two years immediately prior to applying". That formulation appears in Council for Medical Schemes model-rules discussion papers and has been copied widely. It is not the regulation. The regulation says what is quoted above.
Creditable coverage: the years that count, and the years that do not
The formula rewards provable past cover, which Regulation 11 calls creditable coverage:
"creditable coverage" means any period in which a late joiner was — (a) a member or a dependant of a medical scheme; (b) a member or a dependant of an entity doing the business of a medical scheme which, at the time of his or her membership of such entity, was exempt from the provisions of the Act; (c) a uniformed employee of the South African National Defence Force, or a dependant of such employee, who received medical benefits from the South African National Defence Force; or (d) a member or a dependant of the Permanent Force Continuation Fund, but excluding any period of coverage as a dependant under the age of 21 years.
That final exclusion catches almost everyone and is worth stating plainly: the years you spent on your parents' medical aid as a child do not count. Twenty-one years as a child dependant contributes precisely nothing to your creditable coverage.
What does count is cover in your own right, or as an adult dependant from 21 onwards — including periods on an exempt entity's scheme, and military medical cover.
Note also what is not in the list: hospital cash plans, gap cover, and medical insurance products regulated under the Short-term or Long-term Insurance Acts are not medical schemes. Years on a health insurance product are not creditable coverage, however much you paid for it. Our explainer on the difference between a medical scheme and medical insurance sets out why the two sit under different laws.
The formula
Regulation 13(3) is one line:
A = B minus (35 + C)
Where A is the number of years used to pick your penalty band, B is your age at the date of application for membership or admission as a dependant, and C is the number of years of creditable coverage which can be demonstrated.
In words: take your age, subtract 35, subtract every year of provable past cover. What is left is the number that picks the band.
The bands
Regulation 13(2) says the penalties "shall not exceed the following bands":
| A (years) | Maximum penalty |
|---|---|
| 1–4 years | 0,05 × contribution |
| 5–14 years | 0,25 × contribution |
| 15–24 years | 0,5 × contribution |
| 25+ years | 0,75 × contribution |
Three details that change how you read that table.
These are maximums, not tariffs. The regulation says the penalty "shall not exceed" the band. A scheme may charge less, and some do. It is worth asking, and worth comparing across schemes, because nothing obliges every scheme to charge the ceiling.
If A is zero or negative, there is no penalty. The table starts at one year. Someone applying at 40 with six years of creditable coverage has A = 40 − (35 + 6) = −1, and falls outside the table entirely.
The penalty attaches to one person's contribution, not the family's. Regulation 13(1) says penalties "must be applied only to the portion of the contribution related to the member or any adult dependant who qualifies for late joiner penalties". If you are penalised and your spouse is not, the loading applies to your slice of the contribution. Child dependants are never late joiners — the definition covers applicants and adult dependants.
Worked through
A 50-year-old applies to join a scheme in her own name. She was on her parents' scheme until 22 — but only the year from 21 to 22 counts, because coverage as a dependant under 21 is excluded. She was then on an employer scheme for five years in her late twenties, and uninsured since.
C = 6 years. B = 50.
A = 50 − (35 + 6) = 9.
Nine years falls in the 5–14 band, so the maximum penalty is 0,25 × her contribution — a 25% loading on her portion, permanently.
Had she been able to prove eleven more years of cover, C would be 17, A would be −2, and there would be no penalty at all. That is the whole reason the paperwork matters.
Proving your years, and why timing is everything
Regulation 13(6) is unusually helpful to applicants. Where documentary evidence cannot be obtained, a sworn affidavit is sufficient proof, provided you declare:
- the relevant periods in which you were a member or dependant, and the names of the relevant schemes or entities; and
- that reasonable efforts have been made to obtain documentary evidence of those periods, but have been unsuccessful.
Old schemes close, administrators change hands, and records from the 1990s are often simply gone. The regulation anticipates that. If you cannot get a membership certificate, an affidavit does the job.
But Regulation 13(4) sets a hard limit on how much good it does you afterwards:
"Where an applicant or his or her dependant produces evidence of creditable coverage after a late joiner penalty has been imposed, the scheme must recalculate the penalty and apply such revised penalty from the time such evidence is provided."
Read that again. The scheme must recalculate — but the corrected penalty applies prospectively. There is no refund of the loading you have already paid while you were looking for the certificate. If it takes you eight months to track down proof of four years' cover, those eight months of overcharge are gone.
Assemble the evidence before you apply, not after. That is the single most valuable thing in this article.
It follows you
Regulation 13(5): "Late joiner penalties may continue to be applied upon transfer of the member or adult dependant to other medical schemes."
Switching schemes does not reset the loading. The new scheme is entitled to apply the penalty. This matters for the annual open-enrolment shuffle: a penalised member comparing options is comparing loaded contributions everywhere, and should ask each scheme what loading it will actually apply rather than assuming the ceiling.
Schemes are also required by Regulation 13(7) to report to the Registrar each year on the number of late joiners enrolled in each band, which means the Council for Medical Schemes has the data even if it is not front-page reading.
Late joiner penalties are not waiting periods
Since the two get conflated constantly, the distinction in one table:
| Late joiner penalty | Waiting period | |
|---|---|---|
| Source | Regulation 13 | Section 29A of the Act |
| What it does | Adds up to 75% to your contribution | Delays access to benefits |
| How long | Permanent, and portable between schemes | 3 or 12 months, then over |
| Triggered by | Being 35+ with too few years of provable cover | Joining, or joining with a pre-existing condition |
| Can both apply? | Yes — they are independent |
Our guide to medical aid waiting periods covers the section 29A rules, including the protections that apply when you move between schemes or change jobs. The two instruments can and often do apply at the same time to the same new member.
Worth knowing alongside both: a scheme may not refuse you membership, and every option must cover the prescribed minimum benefits regardless of any penalty you are carrying. A late joiner penalty raises what you pay. It does not reduce what you are entitled to.
What to do if you are approaching this
If you are under 35, the cheapest thing you will ever do for your future medical contributions is join now and not let a gap exceed three months. Every year of cover from 21 onwards is a year off the formula later.
If you are over 35 and uninsured, work out your A before you shop. Gather membership certificates from every scheme you or your parents were on after you turned 21, and prepare an affidavit for the periods you cannot document. Then ask each scheme, in writing, what loading it will apply — because the bands are ceilings and schemes differ.
If you are already paying a penalty, check the arithmetic. Ask the scheme for its calculation of A, B and C. If it has undercounted your creditable coverage — and the exclusion of child-dependant years before 21 is exactly the sort of thing that gets applied inconsistently — produce the evidence immediately, because the correction only runs from the day you hand it over.
Comparing options while carrying a loading is a different exercise from comparing them clean; our medical aid comparison is a starting point, but ask each scheme for a quote that shows the penalty separately from the base contribution so you can see what you are actually choosing between.
Frequently asked
Does the penalty ever fall away? No. There is nothing in Regulation 13 that ends it. It is permanent and it transfers between schemes.
I was on my parents' medical aid until I was 24. Does that count? Only the years from 21 onwards. Coverage as a dependant under the age of 21 is expressly excluded from creditable coverage.
I had gap cover for ten years. Does that count? No. Gap cover and health insurance products are not medical schemes, and the definition of creditable coverage is limited to medical schemes, exempt entities, SANDF medical benefits and the Permanent Force Continuation Fund.
Can a scheme charge more than the band? No. The regulation says the penalty shall not exceed the band. It may charge less.
I have been on a scheme without a break since 1999. Am I safe? If your coverage began before 1 April 2001 and you have never had a break exceeding three consecutive months since 1 April 2001, you fall outside the definition of a late joiner altogether — whatever your age when you switch.
Does the penalty apply to my children? No. Only applicants and adult dependants can be late joiners.
