Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Save for a child’s university or college costs through RESPs. (Photos.com)
Save for a child’s university or college costs through RESPs. (Photos.com)

Putting money into an RESP

Government grants and bonds Add to ...

​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 Alberta, Quebec or Saskatchewan, your child may be eligible for additional grant money under the Alberta Centennial Education Savings Plan, the Quebec Education Savings Incentive or the Saskatchewan Advantage Grant for Education Savings.   

More Related to this Story

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 each 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 2013 is:

  • $43,561 or less – you could receive up to $100 extra (20%) in grant money on the first $500 you contribute,

  • between $​43,561 and $87,123 – you could receive up to $50 (10%) extra in grant money on the first $500 you contribute.

If your child is between age 15 and 17

Special rules apply to beneficiaries between the ages of 15 and 17. By December 31 of the year a beneficiary turns 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).

2013 CESG amounts

Example – Total RESP contributions of $500 in 2013

Net family income

​Basic CESG amount

Additional CESG amount

Total CESG amount

​$43,561 or less

​$100

​$100

​$200

​Between $43,561 and $87,123

​$100

​$50

​$150

​$87,123 and over

​$100

​0

​$100

 

Example – Total RESP contributions of $2,500 in 2013

Net family income

​Basic CESG amount

Additional CESG amount

Total CESG amount

​$43,561 or less

​$500

​$100

​$600

​Between $43,561 and $87,123

​$500

​$50

​$550

​$87,123 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 2013 must be less than $43,561 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.

Watch this video to learn more about how CESGs work.

Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca

Follow us on Twitter: @GlobeInvestor

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories