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A Canada
Education Savings Grant (CESG)
is a grant offered by the Government of
Canada to
encourage parents, family and friends to save for a
child’s education after high school. A CESG
is paid by Human Resources and Skills Development
Canada directly into
the child's RESP.
To date, over two million children have benefited from
Canada Education Savings Grants.
Eligibility for the CESG
Every child up to and including age 17 is eligible to
receive the grant, provided:
-
the child is a Canadian resident;
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the child has a valid social insurance number (SIN);
-
the child is named as a beneficiary
of an RESP;
and
-
money has been put into the RESP.
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Special conditions exist for children 15 years of age and
older.
Children aged sixteen (16) or seventeen (17) years are
entitled to the CESG if one of the following two
criteria is met:
1) At least $2,000 in contributions have been made for
the beneficiary and not withdrawn before the end of the
year in which he/she reached the age of 15 years, or;
2) Annual contributions of at least $100 have been made
and not withdrawn for the beneficiary during any four
years, consecutive or not, prior to the year in which
he/she reaches age 15. |
The Amount of the CESG
The amount of the grant is based on your family income. The amount
can change over time as your family income changes.
On
the first $500 of your
investments in your
child’s RESP
in a year,
the Canada Education Savings Grant will give you:
-
40
%, if your net family income
is $45,282* or less.
-
30%
, if your net family income
is between $45,282* and $90,563*.
-
20%, if your net family income
is more than $90.563*.
*2016
income amounts shown - The family net income amounts are
updated each year based on the rate of inflation.
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.
Your net family income is reported on your Canada Child Tax Benefit
statement (commonly known as “baby bonus”, or “family allowance”)
that you receive from Canada Revenue Agency each July.
CESG Limits
There are annual and lifetime limits on the amount that a child can
receive as a Canada Education Savings Grant. The annual limit
ranges from $500 to $600 depending on the net income of the child’s
family.
The lifetime
CESG limit for a child is $7,200.
If the savings for a child are in a family plan, the lifetime CESG
limit for each child is still $7,200.
Note: In this case, “lifetime” means from birth up to the end of the
year that the child turns 17 years of age.
Carry over of the CESG Rights
The earlier a parent applies for the grant (CESG), the
sooner the grant money starts to grow in an
RESP. However, you can carry over
your unused grant amounts for possible use in the
future.
As
of 1998, grant room accumulates for a child until the
end of the year in which he/she turns 17, even if he/she
is not a beneficiary of an RESP. From 1998 to 2006, $400
was added annually to the grant room for each eligible
child since 1998 (or since birth if the child was born
after 1998).
In
2007 or later, $500 is added annually to the grant room
for each eligible child since 2007 (or since birth if
the child was born after 2007). Unused Basic CESG
amounts are carried forward for possible use in future
years.
However, the additional amounts for modest- and
middle-income families introduced in January 2005 will
not be added to grant room available for future.
If there is unused grant room because of contributions of
less than the maximum in previous years, you can invest more
than $2,500 annually and still still received the grant,
however, the maximum 20% CESG for a year will be $1,000.
Using the CESG
As soon as the child named in an RESP
is enrolled in a qualifying
educational program
or a
specified
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 the child named in an RESP 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 child named in the
plan. That child may use an amount of the CESG up to his or
her lifetime limit as described above.
Steps to Getting the CESG
To get the CESG, all you need to do is to:
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Apply for a birth certificate and then a Social Insurance Number
(SIN) for your child.
-
Apply to the Canada Revenue Agency for the Canada Child Tax
Benefit, if you qualify.
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Open an RESP for a child (Call
us at 416-493-0101 for details).
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Put some money in your RESP.
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The
financial institution where you opened your RESP will apply for the
CESG on behalf of
the child.
The grant money will be deposited directly into your child’s RESP.
Other Saving Opportunities
Depending on the income of the child’s family, the child may also
qualify for the Canada
Learning Bond.
For more information, consultation and to get your personal
RESP illustration, please call at
416-493-0101,
1-877-443-0101
or
Ask Your Question
Online
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