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The Canada Education Savings Grant is a government grant given to those saving for a child’s education. The grant amount depends on net income, and the more saved, the more the child receives. The child must have an RESP account, and special rules apply for those over 15. Funds can be used for tertiary education or returned to parents.
The Canada Education Savings Grant is a Canadian government cash grant given to people who are saving money for a child’s education. When parents, grandparents, or others save a specified minimum amount of money into a child’s Registered Education Savings Plan (RESP), the government contributes additional funds to the child’s RESP. The more money saved, the more money the child receives. The grant amount depends on the household’s net income, with those earning less income receiving more money. This program encourages parents and guardians to save in advance for a child’s tertiary education.
After a child is born, their parents can open an RESP account to start saving for their education. These accounts can only be opened with a Canadian bank or similar financial institution or with a certified financial planner. Parents will need a Social Security Number (SIN) for the child, which requires a birth certificate or permanent resident card. Once the account is opened, the financial institution can request that the Canada Education Savings Grant be deposited into the child’s RESP account when the parents make the minimum contribution.
When parents save a minimum amount of money into their child’s RESP account during a year, the Canadian government pays a certain amount of money into the RESP account. If parents save an amount that reaches another contribution threshold, the government puts more money into the RESP account. The amount of the government contribution varies according to the household’s net income.
All children under 18 are eligible for an Education Savings Grant in Canada, provided they are Canadian residents. However, special rules apply for children who have reached the age of 15 and wish to continue receiving the Canada Education Savings Grant. The child’s RESP account must hold a certain minimum amount by the end of the year in which the child turns 15. For example, if the child turns 15 in March 2010, the parents must have contributed at least the specified minimum amount to the child’s RESP. account by 31 December 2010.
When your child graduates from high school, they can pay for full-time or part-time education in tertiary education institutions using funds from their RESP account. If the child does not go back to school after graduation, the money remains in the RESP account for up to 36 years from the date the account was opened, in case the child decides to continue education later. If the child does not continue his studies, the parents receive the amount saved back. The Canada Education Savings Grant can go towards the education of the child’s siblings or be returned to the government.
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