By Lee Sherman
When adopting a child, many young couples would prefer to adopt a newborn. But adopting a newborn can be expensive and difficult. If you are looking for another way to adopt, consider adopting from foster care.
What is foster care?
Foster care is a state sponsored approach to adoption in which minors whose birth parents are either unable or unwilling to care for them are placed temporarily into a ward, group home or private home where they are cared for by a state-certified caregiver referred to as a “foster parent” until such time as they are adopted. In this way the burden of care is shifted to loving parents and a family-friendly environment rather than a cold institution. All legal decisions regarding the child are made by the state while the foster parent is responsible for the day-to-day care. Becoming a foster parent can be rewarding in itself and could be a stepping stone to adoption.
Foster care is meant to be a short-term solution until a more permanent placement can be found. Sometimes the child will be reconciled with their birth parents. Or they may be placed in a relative’s home (perhaps an uncle or aunt, step-parent, or grandparent). If there isn’t a relative available that is willing or able to adopt, then the government looks to the foster parent or a role model such as a teacher, rabbi, or coach. While many foster parents do adopt, others find satisfaction in helping to find permanent homes for the children in their care.
The idea that some foster parents profit from foster care is a myth. While foster parents do receive some non-taxable reimbursement (the amount varies by state, age of the child, level of care provided, and other variables) according to Family Foster Care Reimbursement Rates in the U.S., a report from a 2012 National Survey on Family Foster Care Provider Classifications and Rates by Kerry DeVooght, Child Trends, and Dennis Blaze, most will tell you that the amount received doesn’t even come close to the cost of caring for the child. Looking through the reimbursement rates, you’ll see that several states have basic rates that equal less than half the estimated cost of care (an average of $25 per child per day).
The reason that it is so difficult to place foster kids is that most people adopting children are looking to adopt a baby. Most kids in foster care are around the age of 8. But, if you aren’t too concerned about the age of the child, adopting a foster care child, can save you a lot of money.
How much does it cost?
Adoption is usually quite expensive (even before you add up the costs of raising a child). Adopting a healthy newborn can cost as much as $50,000 if you go through an adoption agency. Working with an adoption attorney can be more reasonable, averaging around $10,000. But adopting a foster child cost little to nothing. In addition, you may be eligible to receive financial assistance from the federal government’s Title IX-E Adoption Assistance Program. You could receive a one-time payment, ongoing monthly support, or even healthcare in the form of Medicare and Medicaid. Adopting means adding another dependent. Be sure to discuss the tax ramifications of adopting from foster care with your financial advisor.
Lee Sherman is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Lee is an experienced journalist and editor with over 30 years of expertise with a significant history of writing in the personal finance and technology arenas.