What is the Canada Education Savings Grant?

The Canada Education Savings Grant is a program designed to help you save for your child’s education. For every year that you contribute to your RESP, the Canada Education Savings Grant offers a matching percentage based on your income, up to $500 or $600 per year. The Canada Education Savings Grant maxes out at a lifetime contribution of $7,200 per child. The Canada Education Savings Grant matches a percentage of your annual contributions up until your child turns 17. Basic CESG is matching 20 percent of your contributions per year, up to a maximum contribution of $2,500, translating to $500 in CESG.

CLB vs. CESG

The Canada Learning Bond, or CLB, is a bond that your child may be eligible to receive in addition to the Canada Education Savings Grant, or CESG. The CESG is a grant available to all Canadian children whose parents contribute to their RESP. The Canada Learning Bond is available regardless of whether the parents contribute to the RESP, but only for eligible families. Between the CLB and the CESG, you could receive up to $9,200 in government money for your child’s education - all through opening and contributing to a RESP.

One little known fact is that you can carry over unused contribution limits to future years. For example, if you only contribute $2,000 in one year, you can contribute an extra $500 in a subsequent year, for a total of $3,000 eligible for the CESG matching percentage. You can only carry over a maximum of one year’s worth of unused contribution allowance per year.

How to Apply for the CESG

To apply for the Canada Education Savings Grant, all you need to do is open a RESP with a provider that offers Canada Education Savings Grant. Your RESP Canada Education Savings Grant provider should automatically enroll you in the Canada Education Savings Grant program. When you’re selecting a RESP provider, make sure you choose one that offers Canada Education Savings Grant and CLB to maximize your child’s education savings.

Qualifying for Additional CESG

You may be eligible for additional Canada Education Savings Grant funds if your income falls within a certain level. When you qualify for additional Canada Education Savings Grant, you can receive an extra 10 or 20 percent in Canada Education Savings Grant on the first $500 you contribute per year. To apply, your income must fall within certain guidelines, and you must contact your RESP provider. Ask your RESP provider to fill in the Additional Canada Education Savings Grant Form to find out if your child is eligible.

Calculating CESG Contributions

If your net family income is over $81,941, you are only eligible to receive the Basic Canada Education Savings Grant. You can receive 20 percent on your contributions up to $2,500 per year. This maxes out the Basic CESG contribution at $500 per year.

If you’re eligible for additional Canada Education Savings Grant based on income qualifications:

• If your net family income is between $40,970 and $81,941 per year, you can receive 30 percent Canada Education Savings Grant on the first $500 you contribute, and 20 percent on your contribution between $501 and $2,500. Basic and additional Canada Education Savings Grant at this income level maxes out at $550 per year.
• If your net family income is $40,970 or less, you can receive 40 percent Canada Education Savings Grant on the first $500 you contribute, and 20 percent on contributions between $501 and $2500. Basic and additional Canada Education Savings Grant at this income level maxes out at $600 per year.

Regardless of your income level, your Canada Education Savings Grant maxes out at a lifetime benefit of $7,200. Even if you’re receiving a higher level of benefits based on your income level, you can still only receive $7,200.