RESP
Registered Education Savings Plan
Embedded Files
Click the link below to download our RESP brochure:
Click the link below to download our RESP brochure:
Those who wish to obtain a post secondary education are confronted with the daunting task of being able to afford to pursue those dreams. Besides tuition, there is the cost of rent, books, food and technology requirements to consider. Typically, the student will take out loans to help meet some of this cost and likely take on a part-time job as well. An RESP can help to cushion this cost and the earlier that you start an account for your child / children, the more time you have to grow the investment.
RESPs offer an opportunity to have investment income grow on a tax-sheltered basis while it remains in the plan. RESP contributions are not tax-deductible nor is interest paid on a loan used to contribute to an RESP. The maximum life RESP contribution limit per beneficiary is $50,000. Each child could also earn up to $7,200 in RESP grant money (CESG-Canada Education Savings Grant) .
Question: When can I open an RESP?
Answer: As soon as you get the child a Social Insurance Number
GOVERNMENT GRANTS
Canada Education Savings Grant (CESG) :
Basic Grant:
The federal government provides a matching grant of 20% on contributions up to an annual maximum of $500 per year ($2,500 contribution x 20%). If contributions are not made in a particular year they can be carried forward for use in another year with a maximum of $1,000 per year.
Additional Grant:
The federal government also provides an additional grant based on the net family income of the primary caregiver. For 2023, any family making less than $106,717 will be eligible for some portion of the grant on the first $500 of contributions. Any family making less than $53,359 will receive the full additional CESG as outlined in the chart below.
Canada Learning Bond (CLB) :
This program is designed to help lower-income families to save money for their child's education. No personal contributions are necessary and the Government of Canada provides $500 for the 1st year of eligibility and then $100 each year of eligibility until the child reaches age 15. For the period ended June 30, 2023 the adjusted family income to qualify if you have 1-3 children is less than or equal to $50,197.
RESP Withdrawal Rules :
Once the child begins post-secondary education they will receive withdrawals from the RESP known as EAPs (Educational Assistance Payments). The payments are made up of grant money, earnings on the grant money and earnings on the contributions that were made. These payments are considered as income for the student and are considered taxable but since most students have little or no income, there is no tax owing.
CLICK ON THE GOVERNMENT PROGRAM ABOVE FOR MORE DETAILS VIA THEIR WEBSITE
Let Querencia Wealth help you to save for your child/children's future.
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