Qualified Adoption Expenses in Australia (2025): Full Guide & Policy Update

Adopting a child is a life-changing decision, but it often comes with a daunting price tag. As we enter 2025, Australian families seeking to grow through adoption are navigating a landscape of updated rules, rising expenses, and new financial support options. Understanding what counts as Qualified Adoption Expenses (QAE) is crucial for accessing grants, tax offsets, and other forms of assistance designed to make adoption more accessible and affordable.

What Are Qualified Adoption Expenses?

Qualified Adoption Expenses (QAE) refer to the reasonable and necessary costs directly tied to legally adopting a child. In Australia, these expenses can cover a wide range of services and fees, both domestically and internationally. Recognising the financial burden, the Australian government and several states have refined definitions and support in 2025 to better reflect the true costs families face.

• Adoption agency fees: Charges by accredited agencies for processing, assessment, and placement services.
• Legal and court fees: Costs for legal representation, document preparation, and required court hearings.
• Travel and accommodation: Expenses for mandatory travel to meet the child or attend proceedings, including interstate or overseas journeys.
• Home study and assessment: Fees for the required home study, background checks, and psychological assessments.
• Medical and counselling: Payments for mandatory health checks, vaccinations, and pre/post-adoption counselling for the child or adoptive parents.

What’s not included? Everyday living expenses, voluntary gifts to agencies, or costs unrelated to the adoption process (such as general childcare or education fees) are typically excluded from QAE definitions.

2025 Policy Updates: More Support, Clearer Rules

This year, several key policy updates are shaping how families can claim adoption-related expenses:

• Federal Adoption Cost Offset: As of July 2025, a new offset allows eligible families to claim up to $4,000 in QAE per adoption, phased out above certain income thresholds. This replaces the previous patchwork of state-based deductions.
• Expanded eligibility: The updated definition now includes certain international document translation and post-adoption integration costs, reflecting the realities of modern adoption.
• Streamlined grant application: The National Adoption Support Grant has been simplified, with a single portal for all states and territories and faster processing—most applicants now receive a decision within 30 days.
• Record-keeping requirements: The ATO and state authorities are tightening documentation rules. Families must retain detailed receipts, contracts, and travel logs for at least five years after the adoption is finalised.

These changes aim to reduce red tape and provide clearer guidance for families while cracking down on fraudulent claims.

Real-World Example: The Thompsons’ 2025 Adoption Journey

Consider the Thompsons, a Melbourne couple who completed an intercountry adoption in early 2025. Their QAE included:

• $3,200 in agency and legal fees
• $1,100 in travel expenses to Vietnam
• $750 for a home study and background checks
• $400 for document translations and notarisation

With the new Federal Adoption Cost Offset, the Thompsons were able to claim the maximum $4,000, reducing their net out-of-pocket expenses. They also received $2,000 from the National Adoption Support Grant, thanks to streamlined eligibility. Their experience highlights how recent reforms are making adoption more financially feasible for Australian families in 2025.

How to Claim and Document Your QAE

To maximise your financial support, follow these key steps:

1. Keep meticulous records: Save all invoices, receipts, contracts, and official correspondence related to your adoption process.
2. Track travel and accommodation: Note dates, locations, and purposes for every trip. Use a travel log template provided by the ATO if claiming overseas expenses.
3. Apply early: Submit grant and offset applications as soon as the adoption is legally finalised. Most programs require claims within 12 months of completion.
4. Consult the official guidelines: Refer to the Department of Social Services (DSS) and ATO for the most up-to-date lists of eligible expenses and documentation standards.

Remember, incomplete or poorly documented claims may lead to delays or rejection.

What’s Next for Adoption Funding in Australia?

With ongoing advocacy and government review, further enhancements to QAE definitions and support are likely in 2026 and beyond. Watch for updates on income thresholds, eligible expense categories, and digital claim processing as Australia continues to modernise its adoption framework.