Often, this column answers questions about specific investment, retirement or tax strategies. But financial planning should look at every aspect of your life, and the expenses that go along with how you would like to live. That includes your decision to raise a family. Having kids is expensive—and for Canadians with fertility issues, there are added costs. Here’s a high-level look at some of the options, what you might expect to pay, and the financial breaks available.
What are the costs and funding options for fertility treatments?
The primary treatment options for infertility are intrauterine insemination (IUI) and in vitro fertilization (IVF).
IUI is a type of artificial insemination whereby sperm from a partner or donor is inserted into a patient’s uterus during ovulation. The cost may range from $2,000 to $4,000. Manitoba, Ontario, Quebec and New Brunswick all provide some government financial support.
While there are no eligibility requirements or limits on provincially-funded treatment in Ontario, the out-of-pocket cost for drugs may be about $1,000 per cycle.
Manitoba offers a Fertility Treatment Tax Credit of up to $8,000 for residents, which can be applied to treatments and related medication. The credit can also be applied against any costs not covered by private or group health care plans.
In Quebec, there is a Tax Credit for the Treatment of Infertility that can be as much as $16,000.
Aspiring parents in New Brunswick can get up to $5,000 as a one-time grant from the Special Assistance Fund for Infertility. These provincial funds can be used for IUI or IVF.
In Ontario, patients under age 43 can get one provincially funded in-vitro fertilization treatment cycle, or two if acting as a surrogate and carrying a baby for someone else. Fertility drugs are not covered and may cost about $5,000 per cycle.
IVF costs can range from $10,000 to $20,000 per cycle, including drug costs. Although a single cycle of IVF may prove successful, many patients need to do multiple cycles, particularly if they begin fertility treatment at a later age.
Generations of Hope is an organization that helps fund IVF or other fertility treatment for those who may not otherwise be able to afford it. Some clinics offer financing arrangements as well.
Tax treatment of fertility costs
Fertility costs are an eligible medical expense. Tax refunds for medical expenses range from 19% to 26% of expenses exceeding 3% of net income, depending on the province or territory of residence.
Some group or private insurance plans provide partial coverage for fertility expenses. For business owners, a Health Spending Account (HSA) may present a very tax-efficient opportunity to fund those costs for employees.
If medical options are unsuccessful, there are other options. Adoption timelines and costs can vary from months to years. Although public adoptions for little to no cost are possible, the wait list is long. As a result, private adoptions are more common, and for a child born in Canada can cost $10,000 to $25,000, including mandatory training courses in some provinces. An international adoption can cost $25,000 to $50,000 or more, depending on the country.
Surrogacy is another option available to aspiring parents. It is a legal process in Canada that can cost up to $75,000 or more. Interestingly, the Assisted Human Reproduction Act prevents a surrogate from being paid for carrying a baby, but the surrogate can be reimbursed for certain expenses, including loss of work-related income.
There may also be provincial or territorial subsidies and grants available for adoptive parents, and there can be additional help for those adopting a child who is older or has been in foster care.
Adoption expenses may be eligible for a federal tax credit refund of up to $2,509. Several provinces and territories, including British Columbia, Alberta, Manitoba, Ontario, Newfoundland and Yukon provide adoption expense tax credits that can refund between $670 to $1,325 as well.
National Bank offers adoption loans—a type of personal loan specifically intended to finance adoption. Adoptive parents might also consider lower-cost borrowing solutions like a secured home equity line of credit (HELOC). Another alternative is to use investment vehicles like tax-free savings accounts (TFSAs), to save money in a tax-sheltered environment.
For those with financial need, ABBA Canada is a charity that provides grants to help with the adoption process.
Fertility treatment, adoption and surrogacy can provide hope for those who experience difficulty having children on their own. The costs can vary significantly, and so must be planned for. Government funding, tax credits and grants may help fund some or all the out-of-pocket costs for parents.
Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.
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