Canada Education Savings Program (CESP) Helping Parents Save for Their Children’s Post-Secondary Education 1

Post-Secondary Education: defining post-secondary education; credentials required; higher unemployment rates; and help from the Government of Canada. 1

Post-Secondary Education Savings Incentives 1. Canada Learning Bond (CLB) 2. Canada Education Savings Grant (CESG) 3. Additional CESG 2

Canada Learning Bond (CLB): deposit of $500 and $25 to cover costs related to opening an RESP; $100 is deposited each year of eligibility with lifetime limit of $2000; and no contributions required. 3

Eligibility A child is eligible for the Canada Learning Bond if: they were born after December 31, 2003; the family receives the National Child Benefit Supplement under the Canada Child Tax Benefit Parents must be Canadian residents; and an RESP account is opened. The Canada Learning Bond is retroactive. 4

Canada Education Savings Grant (CESG): basic Canada Education Savings Grant adds 20% on every dollar of the first $2,500 saved in an RESP each year until the beneficiary turns 17; lifetime maximum $7,200; and not based on income-level. 5

Additional Grant (A-CESG): depends on the net family income of the primary caregiver; extra 10 or 20% on the first $500 contributed annually to an RESP; income eligibility levels change every year; and additional grant is included in lifetime maximum of $7,200. 6

What is an RESP? Education savings plan registered with Canada Revenue Agency Contributions grow tax free. Benefits? allows access to the Canada Learning Bond and the Canada Education Savings Grant; creates expectations for post-secondary education; increases aspirations; and compound interest accumulates to increase savings. RESP can remain open for 36 years. 7

Starting your RESP Net Family Income of Primary Caregiver = $43,953* or less You put in:Government gives you: RESP Amount Canada Learning Bond $0$500 Canada Education Savings Grant $100$40$140 $640 * 2014 income level If your income is over $43,953 you would get $30 on top of your own $100 and any income level above $87,907 would get $20. 8

Choosing the Right RESP: Individual Plans Only one child (beneficiary) – no relationship to the person opening the RESP (subscriber). Family Plans Parents or grandparents can open this type of plan. Beneficiaries must be sisters and brothers. Group Plans Grouping of individual plans administered for children born in the same year. 10

Documents Required to Open an RESP: 1.Social Insurance Number for the primary caregiver and the beneficiary (no cost associated). 2.Authorization from primary caregiver. The primary caregiver is the person who receives the Canada Child Tax Benefit. 11

Using the RESP: Educational Assistance Payment (EAP) The Education Assistance Payment includes the bond, the grant and the interest. Once the child (beneficiary) of the RESP is enrolled in an eligible post-secondary education program, you withdraw the funds on behalf of the student. Your Contributions The accumulated capital still belongs to the you (subscriber) but could also be used to pay for the beneficiary’s studies or other related expenses. 12

Canada Education Savings Program For more information: O-CANADA 13