Canada Education Savings Grant

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The Canada Education Savings Grant or CESG[1] is a Government of Canada incentive to encourage saving for a child's post-secondary education, via partial matching grant[2], for contributors to a Registered Education Savings Plan (RESP).

All children up to age 17 are eligible to receive the Canada Education Savings Grant as long as they are Canadian residents and an RESP has been opened for them. Special rules may apply if your child is between the ages of 15 and 17.

Basic CESG

Basic CESG is a payment of 20% on RESP contributions made on or after January 1, 1998, in respect of an eligible beneficiary, up until the end of the calendar year in which the beneficiary turns 17. The amount of annual Basic CESG payable per beneficiary is limited to the lesser of the following two amounts:

  • Accumulated grant room available for the beneficiary, or
  • Basic CESG Annual Limit.

Additional CESG

Additional CESG is a payment (over and above the Basic CESG amount) of either 10% or 20% on the first $500 or less of annual RESP contributions made on or after January 1, 2005, in respect of an eligible beneficiary, up until the end of the calendar year in which the beneficiary turns 17.

The percentage of Additional CESG paid is based on the adjusted family net income of the beneficiary's primary caregiver and is determined as follows (income numbers as of 2015 [3]; indexed yearly):

Adjusted family net income Additional CESG Rate
$44,701 or less 20%
more than $44,701 but not more than $89,401 10%
more than $89,401 Beneficiary is not eligible for Additional CESG

Grant room

From 1998 to 2006, $400 was added annually to the grant room for each eligible child (or since birth if the child was born after 1998). As of 2007, $500 is added annually to the grant room for each eligible child (or since birth if the child was born after 2007). Grant room can accumulate until the end of the year in which the child turns 17, even if the child is not named as an RESP beneficiary. Unused grant room is carried forward for use in future years.

Basic CESG annual limit

Period Basic CESG Annual Limit Qualifying Contributions for Basic CESG Annual Limit
1998 to 2006 $800 (20% of $4,000) $4,000
2007 or later $1,000 (20% of $5,000) $5,000

Lifetime CESG limit

The lifetime maximum amount of grant per child is $7,200.

Eligibility

To be eligible for the grant:

  • the beneficiary must have a valid Social Insurance Number (SIN);
  • an RESP must have been opened for them;
  • the beneficiary must be a Canadian resident at the time the contribution was made;
  • the contribution must be made prior to the end of the calendar year in which the child turned 17;
  • if the beneficiary is 16 or 17 years old, one of the following two conditions must be met:
    • A minimum of $100 in annual RESP contributions has been made in each of any four years (consecutive or not and not withdrawn) before the end of the calendar year the beneficiary turned 15, OR
    • A minimum of $2,000 in RESP contributions has been made (and not withdrawn) before the end of the calendar year the beneficiary turned 15.

Grant carry forward and catch-up

The unused grant room is carried forward for potential use in future years. The amount of grant room carried forward will affect the maximum amount of Basic CESG a beneficiary can receive in a single calendar year, provided sufficient contributions are made to the RESP. The maximum catch-up is one missed year at a time (see above: Basic CESG Annual Limit).

References

  1. Canada Revenue Agency, Canada Education Savings Grant (CESG), viewed July 3, 2009.
  2. Employment and Social Development Canada, RESP Provider User Guide, viewed December 12, 2015.
  3. Employment and Social Development Canada, Revised Income Brackets for Additional CESG, Information Bulletin CESP/PCEE-2014/15-002-608, December 19, 2014, viewed December 12, 2015

External links