RSSCanada Education Savings Grant
The Canada Education Savings Grant (CESG) provides grants to Registered Education Savings Plan (RESP) contributors until the beneficiaries reach the age of 17.
Eligibility Information
- Parents, relatives and friends of a beneficiary may contribute up to a lifetime limit of $50,000 per child.
- Contributions must be made prior to the end of the calendar year in which the beneficiary turns 17.
- Special conditions exist for beneficiaries aged 16 and 17.
- Other criteria may apply.
In order to receive the CESG, children must meet the following requirements:
- become a beneficiary under an RESP
- be a Canadian resident at the time the RESP contributions are made
- have a Social Insurance Number **Click here to apply for a SIN**
- be 17 years old or under
- other criteria may apply
Application Information
Call me today and we can fill out an application form!
Financial Information
On the first $500 you save in your child’s RESP, the Canada Education Savings Grant will give you:
- 40 cents per dollar, if your net family income is $37,885 or less
- 30 cents per dollar, if your net family income is between $37,885 and $75,769
- 20 cents per dollar, if your net family income is more than $75,769
- No matter what your net family income is, when you save more than $500, the Canada Education Savings Grant will give you 20 cents for every extra dollar, up to $2,500.
The family net income amounts are updated each year based on the rate of inflation. Income amounts shown are for 2008.
Steps to Getting the CESG
To get the CESG, all you need to do is:
- Apply for a Social Insurance Number (SIN) for your child. There is no fee to get one, however, certain documents are required. Contact 1 800 O-CANADA for more information or visit their website.
- Click here to go DIRECTLY to the SIN application form.
- Apply to the Canada Revenue Agency for the Canada Child Tax Benefit (CCTB), if your family net income is $75,769 or less. This form is generally provided at the hospital where your child was born. Click here for more information.
- Let me help you choose the best RESP provider.
- Open an RESP for a child.
- Put some money in your RESP.
- I will help you apply for the CESG on behalf of the child.
- The grant money will be deposited directly into your child’s RESP.
Lifetime CESG Limits
The most CESG your child can receive is $7,200. This lifetime limit also applies to each individual child when the CESG money is shared with other beneficiaries as in a family RESP.
In this case, “lifetime” means from birth up to the end of the year that the child turns 17 years old.
Using the CESG
As soon as your child is enrolled in a qualifying educational program, he or she can start receiving money from the RESP. At that time, the CESG along with income earned by the money in the RESP is paid to the beneficiary as an Educational Assistance Payments (EAPs). Each EAP includes a specific amount of the CESG.
If your child does not go on to education after high school, the CESG must be returned to the Government of Canada, unless the RESP is a family plan. If the RESP is a family plan, the CESG may be used by another eligible child named in the plan. That child may use an amount of the CESG up to his or her lifetime limit as described above.
If your child does not go on to education after high school, the money you put into the RESP will be paid, subject to taxes.
What happens if my child does NOT go on to post-secondary education?
The RESP can stay open for up to 26 years. If your child does not continue education right after high school, the money can be used if your child returns to school later. If the money is not used 26 years after the RESP is opened, the amount you saved goes back to you, and the Canada Education Savings Grant may be used for a brother or sister’s education. If not, the grant will be returned to the Government of Canada. The Canada Learning Bond is returned to the Government of Canada. Your money can also be withdrawn any time, however taxes will apply.
Information Provided by: Human Resources and Social Development Canada (HRSDC)