The federal government makes contributions to your child's RESP through its grant programs: the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB). If you live in Quebec or Alberta, you may also be eligible for a provincial grant. Adult beneficiaries are not eligible for government grants.
Canada Education Savings Grant
Your child will qualify for the CESG until the end of the year they turn 17. The lifetime limit for the grant is $7,200 for each child. If your child doesn't continue with their education after high school, you can't keep any of the grant money. You must return it to the government.
However, you can transfer money between individual RESPs for siblings without any tax penalties and without having to repay any CESGs. This applies to transfers that take place after 2010. The child who benefits must have been under 21 years old when the plan was opened.
Basic CESG
Each year, the government will match your contribution by 20%, up to a maximum of $500 for each child. You need to contribute $2,500 a year to get the full grant of $500 every year. Your child can carry forward unused grant contribution room until they turn 17.
Additional CESG
Depending on your income, the government may top up your contribution by an extra 10% or 20% on the first $500 of annual RESP contributions made on or after January 1, 2005.
If your net family income in 2011 is:
- $41,544 or less – you could receive up to $100 extra (20%) in grant money on the first $500 you contribute,
- between $41,544 and $83,088 – you could receive up to $50 (10%) extra in grant money on the first $500 you contribute.
To get the full CESG of $500 in a year, you have to contribute $2,500 to the RESP. If you contribute more than $2,500, you won't receive more than $500.
If your child is between age 15 and 17
Special rules apply if you want to continue receiving the CESG for your child. By December 31 of the year they turn 15, RESP contributions must:
- total at least $2,000 or
- have been at least $100 in any 4 previous years (they don't have to be consecutive years).
2011 CESG amounts
Example: Total RESP contributions of $500 in 2011
| $41,544 or less |
$100 |
$100 |
$200 |
|---|
| Between $41,544 and $83,088 |
$100 |
$50 |
$150 |
|---|
| $83,088 and over |
$100 |
0 |
$100 |
|---|
Example: Total RESP contributions of $2,500 in 2011
| $41,544 or less |
$500 |
$100 |
$600 |
|---|
| Between $41,544 and $83,088 |
$500 |
$50 |
$550 |
|---|
| $83,088 and over |
$500 |
0 |
$500 |
|---|
Canada Learning Bond
The CLB provides an additional $2,000 per child to help families with modest incomes save in an RESP.
To qualify:
- Your family income in 2011 must be less than $41,544 a year.
- Your child must be born after December 31, 2003.
- Your family must receive the National Child Benefit under the Canada Child Tax Benefit (also known as family allowance).
You don't have to make any contributions to the RESP to qualify.
If your child doesn't qualify for the bond when you open the RESP, you can apply later if your circumstances change.
Amount of bond:
- $500 for your child at birth and an extra $25 to cover the costs of opening an RESP, and
- $100 for each year your family gets the National Child Benefit until your child turns 15.