Saving for your Child's Education: Federal grants for RESPs

Post-secondary education is a goal most parents have for their children. But the rising cost of college or university has many parents concerned about their ability to afford their child’s education plans. Registered Education Savings Plans (RESPs) can be an effective way to save because they offer tax benefits and allow you to take advantage of federal government grants.

In Canada, the federal government offers two grant programs that can help you grow your child’s RESP:

Canada Education Savings Grant (CESG)

Available to: All parents

Lifetime limit, per child: $7200

Each year, the CESG provides 20% of the Registered Education Savings Plan (RESP) contributions of up to $2,500. That means the CESG can add a maximum of $500 to an RESP each year.

Children from middle- and low-income families might be eligible to get the Additional amount of CESG. If eligible, that means an extra 10% or 20% is added to the first $500 contributed to an RESP each year.

The Additional amount of CESG may be:

• up to $100 if the 2021 adjusted income is $49,020 or less ($500 x 20% = $100)
• up to $50 if the 2021 adjusted income is greater than $49,020 and up to $98,040 ($500 x 10% = $50)

The maximum amount of CESG, including the Additional amount, a child can get is $7,200.

Example: A child named as the beneficiary in an RESP, who is born in 2014 and from a family with an adjusted income of $32,000, could be eligible to get the CESG, plus an additional amount of CESG of 20%.



Canada Learning Bond (CLB)

Available to: The Canada Learning Bond (CLB) is money that the Government adds to a Registered Education Savings Plan (RESP) for children from low-income families. A child is eligible for the CLB if they are from a low-income family, are born on or after January 1, 2004, are a resident of Canada, have a valid Social Insurance Number (SIN) and are named in an RESP.

Lifetime limit, per child: $2000

Eligibility for the CLB is based on the number of qualified children in the family, and adjusted income of the primary caregiver, including the income of a cohabiting spouse or common-law partner.

Learn more about opening an RESP. Contact a member specialist at Vision today.