How to pay for an international adoption
To pay for an international adoption:
- Calculate the total cost of the adoption which may depend upon the agency that you are planning on using and the country that you are adopting from.
- Consider applying for adoption loans and grants or doing a fundraiser.
- Submit your adoption payment via an online transfer service like OFX to lock in great exchange rates and save on excessive bank margins and fees.
- Apply for tax credits and other assistance from your government.
International adoption is a wonderful choice for families who are unable to conceive or who simply wish to expand their family by welcoming a child who is in need from abroad. But many families are surprised when they find out just how expensive an international adoption can be.
Thankfully, there are a few ways that you can go about raising the money that you need to pay for your adoption, and there are also ways to save money, even when it comes down to submitting your payment to the adoption agency that you have chosen.
How much does it cost to adopt a child internationally?
There are a number of factors that will influence the costs associated with an international adoption. These factors include whether or not you use an adoption agency, as well as the country from which your child will be adopted. But you also need to include things like travel costs and filing fees that are charged by the government. Plus, you should keep in mind that adoption agencies will charge varying fees as well. You could find multiple agencies within the same nation, but they could end up charging different fees. That is why checking with various agencies will give you the best idea of where to go to save the most money when adopting a child from overseas. On average, you could expect to pay up to $30,000 USD when adopting a child, but some agencies might be willing to offer reduced fees if you are planning on welcoming a special needs child or an older child into your family. Lower income households who are planning on adopting might also be offered a lower adoption fee. And households who are willing to adopt more than one child at the same time, or those who have adopted in the past and are planning on adopting again, may also get access to reduced fees
How can you start saving up for an international adoption?
Even if you do not currently have the funds available to complete an international adoption, there are several steps that you can take to raise the money that you need.
After researching where you would like to adopt your child from, and how much it will cost to do so, you will have a specific number in mind that you can set as your fundraising goal. Then, you can start preparing and saving by:
- Paying off your credit card debt and other loans. An adoption agency will work diligently to review your financial status prior to granting you permission to adopt a child. Therefore, it is a great idea to pay off any debt that you currently have, from credit cards to car loans and everything in between. Plus, in doing so, you will have fewer expenses to contend with each month, so you will be able to save even more money to pay off those adoption fees.
- Search for adoption grants. Another way to lower your costs is by applying for grants from nonprofit organisations that are willing to help families who are planning on adopting. Just be sure to read through all of the requirements before applying for any grant, as some are only awarded based upon your religious affiliation, your financial need, or your location and where you are planning on adopting a child.
- Host fundraising events. Fundraising events can also be helpful in collecting the money that you need for your international adoption. Through a yard sale or an online auction, you can sell items from the around your house that you no longer need. And you could even host a special event that people can attend after they give a donation. Or, if you are creative, you can make your own arts and crafts to sell to your community or online in an effort to raise money.
- Ask your employer for assistance. Check in with the human resources department at your job to find out if they offer any adoption assistance to employees. You could get a sizable amount to put towards your international adoption, whether you work for a small business or a large corporation.
- Apply for an adoption loan or a line of credit. Look into loan programs that are specifically geared towards families who are hoping to adopt. Then compare their terms with the terms of general loans or home equity loans, which are other good options for getting the money that you need. The funds that you receive will allow you to adopt your child sooner, and you will also be able to repay your loan in manageable instalments.
- Ask friends and family for help. They say it takes a village to raise a child, so consider asking family members or friends to help fund your adoption.
Use an online transfer service to submit your adoption payment
When it is time to pay for your international adoption, using an online money transfer service like OFX could help you save money that you would otherwise spend on hefty bank margins and fees. Credit cards could charge a 3% foreign transaction fee if your currency needs to be converted, while banks charge transfer fees on top of a margin (up to 5%) on the exchange rate. (That’s a whopping $1,500 on a transfer of $30,000.) These extra costs add up, and when you are dealing with an already expensive international adoption, they can make your financial situation more challenging than it needs to be.
After creating a free account with OFX, you can use our simple form to provide all of the necessary banking information to ensure your transfer will go through swiftly and securely.
If the adoption agency allows you to pay your fees in installments, you can set up recurring transfers that can be submitted on a schedule.
Apply for adoption tax credits and assistance
Once your international adoption is complete, you can apply for the appropriate adoption tax credits and other forms of assistance offered by your government. This could help you get back some of the money that you spent once it is time to file your annual income taxes.
- In the United States, the IRS offers “a tax credit for qualified adoption expenses paid to adopt an eligible child,” along with “an exclusion from income for employer-provided adoption assistance.” Just keep in mind that the tax credit is not refundable, so it is limited to the tax liability for the current year, but if there is any credit that exceeds your tax liability, you could carry it forward for up to five years.1 As of 2016, the maximum credit amount per child was $13,460. You can claim the adoption exclusion or credit by completing Form 8839. Please be advised that OFX does not offer tax advice, and you should speak with a qualified tax professional about your unique circumstances.
- In the United Kingdom, if you adopt a child and take time off from work, you might be entitled to the Working Tax Credit for the first 39 weeks of adoption leave.2
- In Australia, if you adopt a child, you might be eligible for parental leave pay, dad and partner pay, a family tax benefit, and parenting payment. And you can apply for these payments once you start the adoption process, so you do not have to wait for everything to be finalised. Plus, you might also receive assistance for providing your child with medical care, including immunisations, and you may be able to get child care assistance that includes a Child Care Rebate.3
While it’s not easy to pay for an international adoption, there are a number of ways to save on the cost of bringing a child into your family. You can often get helpful insights on adoption forums and through community sharing.
IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. OzForex Limited (trading as OFX) and its affiliated entities make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog.