No, the lifetime contribution limit of $50,000 excludes all government grants as well as the distributions and income earned on the investments in the plan.
The Canada Learning Bond(CLB) is a special bond paid to RESPs for children born on or after January 1, 2004 and whose families may not normally be able to save for their children’s post-secondary education. RESP contributions are not required to receive the CLB. • $500 is paid for the first benefit year of eligibility • $100 is paid for any subsequent year of eligibility up to and including the child’s 15th year • The maximum benefit for any one child is $2,000 • CLB payments do not count as part of the $7,200 CESG lifetime limit
Additional CESG is a supplement to the Basic CESG, and the additional amount is based on the net family income of the child’s primary caregiver. The primary caregiver is the person who receives the Canada Child Tax Benefit (CCTB). The net family income is reported on the primary caregiver’s CCTB statement provided by Canada Revenue Agency (CRA) each July. The Additional CESG amount can change over time as the net family income changes.
Effective January 1, 2007, the maximum annual RESP contribution that will qualify for the 20% CESG was increased to $2,500 from $2,000 for a maximum $500 Basic CESG. The lifetime maximum of CESG that one beneficiary can receive is $7,200. In order to be eligible for the Basic CESG, the beneficiary must be a Canadian resident at the time of the contribution, and the contributions must be made before the calendar year the beneficiary turns 18. In addition, certain conditions must be met for the beneficiary to receive Basic CESG in the calendar year the beneficiary turns 16 or 17 years old.
The government grants available for RESPs are: • Basic Canada Education Savings Grant (Basic CESG) • Additional Canada Education Savings Grant (Additional CESG) • Canada Learning Bond (CLB)
A family plan is an RESP set up by a subscriber for one or more beneficiaries. Each beneficiary must be under 21 years of age at the time of designation and must be related to the subscriber by blood or adoption. Children, grandchildren, brothers and sisters are considered blood relationships, while nieces and nephews are not. Subscribers may not designate themselves or a spouse or a common-law partner as a beneficiary under a family plan.
An individual plan is an RESP set up by a subscriber for one beneficiary. A subscriber may designate anyone as the beneficiary of the plan, including himself/herself, a spouse or a common-law partner. There is no age restriction on the beneficiary of an individual plan. The individual plan is the only plan available that allows the beneficiary to be unrelated by blood or adoption and any beneficiary over 21.
Yes. A lump-sum contribution of up to $50,000 lifetime maximum can be made all at once to an RESP; however, the entire lump sum will not be eligible for a government grant. Note: Future government grants would not be available on the lump-sum amount contributed.
Yes. Effective January 1, 2007, the lifetime RESP contribution limit per beneficiary was increased to $50,000 and the annual contribution limit of $4,000 has been eliminated.
An RESP must be terminated on or before the last day of the 35th year following the year in which the plan was entered into.