How to maximize government grants for your RESP

You already know that there are many smart reasons to open a Registered Education Savings Plan (RESP). Good for you! While helping a child achieve their dreams is likely at the top of your list, the ability to grow tax-free income on your hard earned money in an RESP, and the opportunity to maximize government grants are likely not too far behind.

Consider this last benefit – government grants -- for a moment. All you have to do to receive grants is to continue to contribute to your RESP.

Yes, the Government of Canada actually provides this incentive to encourage parents like you to save towards their children’s higher education. So how does one go about maximizing all those grants available? Just follow these simple steps:

  1. Continue to contribute to your child’s RESP each year.
    The government’s Canada Education Savings Grant (CESG) will give you an extra 20% on the first $2,500 contribution you make every year up to the lifetime limit of $7,200 per child. So by contributing the maximum, you can get an extra $500 every year until the limit is reached.

    Potential CESG Boost: up to $500/year

  2. See if you qualify for an additional CESG (ACESG).

    You may also be eligible for additional Canada Education Savings Grants on top of the basic 20% CESG depending on your family’s net income bracket.
    Families with a net income in 2020 of $48,535 or less are eligible for an extra 20% grant on the first $500 contributed, for a total of $100 extra per year.
    Potential Boost: up to $600/year when combined with the basic CESG Families with a net income in 2020 between $48,536 and $97,069 are eligible for an extra 10% grant on the first $500 contributed, for a total of $50 extra per year.
    Potential Boost: up to $550/year when combined with the basic CESG.
    The lifetime maximum for both CESG and ACESG is $7200 per child.

  3. Ensure you have used up all of your carry forwards.

    If there were years where you were unable to contribute your maximum ie $2500 per year and you left some CESG funds on the table, all is not lost. The government allows you to carry forward unclaimed CESGs from prior years.

  4. Live in Quebec or British Columbia? Take advantage of your provincial incentives or grants.

    Residents of Quebec and British Columbia are entitled to even more .

    The Quebec Education Savings Incentive (QESI) will give you an extra 10% of your annual contributions on the first $2,500 you contribute to your RESP each year, up to a lifetime maximum of $3,600 per child. If your family’s income falls below a certain level, you may qualify for another 5%-10% on the first $500 contributed to an RESP every year, subject to the lifetime limit of the grant.

    Potential Boost: up to $3,600

    The British Columbia Training and Education Savings Grant (BCTESG) gives children between 6 and 9 years old an extra $1,200. Best of all you don’t even have to make any RESP contributions to receive it.

    Potential Boost: $1,200

  5. See if you qualify for the Canada Learning Bond.

    Eligibility is based on income, as determined by the government. If you qualify, you can receive $500 in the first qualifying year, and $100 for each following year you qualify, up until the year your child turns 15.

    Potential Boost: up to $2,000

    There are all kinds of ways to maximize your RESP and a CST Sales Representative can help ensure that you’re accessing all the grants that you are entitled to. Talk to us today!

How to maximize government grants for your RESP | CST Blog | C.S.T. Consultants Inc.

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