RESPs

Prepare for your children’s pursuit of a higher education. Plan for their future now!

Types of RESPs

Individual Plan – only one beneficiary – no relationship requirement with subscriber(s)
Family Plan – one or more beneficiaries – each beneficiary must be connected to each subscriber by blood relationship (as defined in the Income Tax Act) or adoption.

Beneficiary

Individuals must have a Social Insurance Number and be a Canadian resident
In an Individual Plan, beneficiary can be anyone, including the subscriber
In a Family Plan, each beneficiary must be connected to each subscriber by blood relationship or adoption and must be under 21 when the plan is entered into.
Only certain beneficiaries are eligible to replace another beneficiary in a Family Plan. The same rules apply to the Individual Plan in order to avoid tax and CESG implications.

Subscriber

Can be joint with spouse/common-law partner
Must have a Social Insurance Number
In an Individual Plan, subscriber can be anyone, including the beneficiary
In a Family Plan, each subscriber must be connected to each beneficiary by blood relationship or adoption

Contributions

Maximum contribution is $4,000.00 per year. If the same beneficiary is assigned to more than one RESP, the combined contributions to those plans may not exceed $4,000 per year.
Lifetime maximum contributions to all RESPs per beneficiary is $42,000.00 (excess contributions are not permitted and subject to penalty)
Contributions are not tax deductible however earnings are tax sheltered until withdrawn
Excess contributions which did not attract CESG in the year cannot be carried forward to attract CESG in a subsequent year

Canada Education Savings Grant

A great incentive to save
20% on the contribution amount each year on the first $2000.
Depending on family income a child could receive additional grant on contributions made after 2004.
Lifetime maximum per beneficiary - $7,200.00
CESG payments do not affect the annual and lifetime RESP contribution limits
For the most up to date information and changes please go to HRDC's website www.hrdc-drhc.gc.ca

Eligibility for Grant

Contributions must be made prior to the end of the year the beneficiary attains age 17 and the beneficiary must be a resident of Canada and have a Social Insurance Number.
RESP beneficiaries age 16 or 17 years are eligible only if:
- a minimum of $2,000 RESP contributions have been made and not withdrawn for that beneficiary before the end of the year the beneficiary attains 15 years,
- a minimum of $100 in annual contributions have been made and not withdrawn for that beneficiary in any 4 years before the end of the year the beneficiary attains 15 years.

It is important to note that there are situations where the grant would have to be repaid. Contact us for full details.

Educational Assistance Payments (EAP)

It is intended that all earnings in the RESP, as well as the CESG received, will be used for education-related costs at a qualifying post-secondary educational institution.
Earnings are sheltered from tax while in the RESP Plan. Both earnings and CESG will be taxable when withdrawn by the Beneficiary.
Withdrawal requests for EAPs must be accompanied by proof of enrolment in an approved education program.
EAPs are limited to $5,000 in the first 13 consecutive weeks in a qualifying educational program.

Investment Options

New Plan - Minimum Deposit - $500.00
Subsequent Lump Sum Deposits:
- Fixed Term $500.00
- Variable Rate $100.00 (For bi-weekly or monthly electronic deposits, the minimum is $25.00)
Quarterly statements

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