Saving for your child’s education can be difficult, especially if you are trying to save for multiple goals or pay down debtDebt Money that you have borrowed. You must repay the loan, with interest, by a set date.+ read full definition at the same time. The federal government offers contributions to your child’s Registered Education Savings Program (RESPRESP See Registered Education Savings Plan.+ read full definition) through its grant programs: the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB).
Canada Education Savings Grant (CESG)
CESG is a grant that matches your contributions to an RESP, up to a maximum of $500 for each child per year. Families of any income level are eligible for the basic CESG. If your income is below a certain amount, you may be eligible for additional grants as well as the Canada Learning Bond (CLB)Canada learning bond (CLB) The federal government makes contributions to an RESP. To be eligible for the CLB, net family income has to be below a certain level. The CLB provides up to $2,000 in RESP contributions, subject to edibility and age of the beneficiary.+ read full definition.
Your child qualifies for the CESG until the end of the year they turn 17. The lifetime limit for the grant is $7,200 for each child. There are also annual maximum limits to the grant. If your child doesn’t continue with their education after high school, you can’t keep the grant money. You must return it to the government.
However, you can transfer money between individual RESPs for siblings without any taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition penalties and without having to repay any of the grant money. 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.
Each year, the government will match your contributionContribution Money that you put into a savings or investment plan.+ read full definition 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 each year. Unused grant contribution roomContribution room The amount you can put into a savings plan like a Registered Retirement Savings Plan (RRSP). If you do not put the full amount into the plan each year, you will have extra, unused contribution room that you can use in later years. Example: Let’s say you can contribute $12,000 to your RRSP this year,…+ read full definition carries forward until your child turns 17.
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 each year.
If your net family income in 2022 is:
- $49,020 or less – you could receive up to $100 more (20%) in grant money on the first $500 you contribute.
- $50,197 to $100,392 – you could receive up to $50 (10%) more in grant money on the first $500 you contribute.
If your child is 16 or 17 years old
Special rules apply to CESG beneficiaries who are 16 or 17 years old. RESP beneficiaries aged 16 and 17 can only receive the CESG if:
- RESP contributions total at least $2,000 before the end of calendar year they turned 15, or
- A minimum annual contribution of $100 was made in at least four previous years.
Find out more about the CESG contributions your child may be eligible for.
Canada Learning Bond
A child is eligible for the CLB if they:
- Were born on or after January 1, 2004
- Are a resident of Canada
- Have a valid Social Insurance Number (SIN)
- Are named in an RESP
- Are from a lower income family
Income eligibility for the CLB is based on net family income and the number of children in the family. Learn more here.
You don’t have to make any contributions to an RESP to qualify for the CLB. If your child doesn’t qualify for the bondBond A kind of loan you make to the government or a company. They use the money to run their operations. In turn, you get back a set amount of interest once or twice a year. If you hold bonds until the maturity date, you will get all your money back as well. If you sell…+ read full definition when you open the RESP, you can apply later if your circumstances change.
Amount of bond:
- $500 for your child at birth, and $100 for each year your family continues to be eligible.
Watch this video to learn more about how CESGs work.
The maximum you can receive per child is:
Canada Education Savings Grant – $7,200
Canada Learning Bond – $2,000.
If you have a group RESP savings plan, you have 60 days after signing your contractContract A binding written or verbal agreement that can be enforced by law.+ read full definition to cancel or change plans provided by scholarship planScholarship plan A type of Registered Education Savings Plan (RESP) that pools together the money of many investors. An investment manager invests the money for you, often in lower-risk, fixed-income investments such as bonds and GICs. Enrolment fees are often high and there may be strict rules.+ read full definition dealers without any penalty. Be sure to read and understand the rules outlined in the short RESP summary in the plan prospectusProspectus A legal document that sets out the full, true and plain facts you need to know about a security. Contains information about the company or mutual fund selling the security, its management, products or services, plans and business risks.+ read full definition.