Education Savings Plan (RESP)

Elite Private Wealth Registered Education Savings Plan

Saving for a child’s education has become a major undertaking. Many clients now cite the importance of a post-secondary education for their children as one of their top financial priorities. Costs to families are rising considerably as government funding for tuition has been reduced in recent years causing clients to be concerned about their future ability to cover these expenses.

The estimated cost of University or College education for 4 years can range between $15,000 -$40,000, depending on the type of program, books, supplies and cost of living on residence. It is now more important than ever to save for your child’s education and benefit from the government grants available to you.

Registered Education Savings Plan (RESP) facts:

  • Contribution Maximum:
    Lifetime maximum of $50,000 per beneficiary
  • Contribution age limit:
    In the case of family RESPs, the final contribution must be made before the beneficiaries 31st Birthday. There is no age limit with respect to contributions to individual RESPs
  • Plane age limit:
    RESP must be collapsed before December 31st on the 35th year following the year the plan is entered into.
  • Canada Education Savings Grant (CESG):
    20% of the annual contribution to an RESP to an annual maximum of $500, until the end of the year in which the beneficiary turns 17. CESG does not count towards $50,000 maximum. Where net family income is less than $40,726 (2009 amount), first $500 contributed annually will receive 40% CESG payment. If net family income is between $40,727 and $81,452 (2009), first $500 contributed annually will receive 30% CESG payment. Contributions beyond the first $500 will continue to receive a 20% CESG payment subject to annual maximums.
  • Who qualifies for the CESG:RESP beneficiaries must be under the age of 18, have as social insurance number and be a Canadian resident to qualify. If a child is 16 or 17, the grant will be paid, provided one of the following criteria has been met:
    • at least $2,000 has been contributed to and not withdrawn from the RESPs for the beneficiary before the yearend in which the beneficiary turned 16.
    • annual contributions of at least $100 must have been made in any 4 years prior to the year in which the beneficiary turns 16.
  • Education Assistant Payments:
    $5000.00 maximum payout within first 13 weeks of a qualifying education program; no limits after 13 weeks.