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How much will the Government contribute to my child’s future?

by Maxine
Posted August 1 2010 12:41am
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The amount the government will contribute to your RESP depends on several factors. There are two programs available:

  1. The Canada Education Savings Grant
  2. The Canada Education Savings Grant provides a financial incentive for parents to save for their child’s post-secondary education using RESPs.  

This grant equals 20% on the first $2,500 of your annual contributions.

On the first $500 you save in your child’s RESP account, the Canada Education Savings Grant will give you:

  • Up to $200, if your net family income is $38,832 or less
  • Up to $150, if your net family income is between $38,832 and $77,664
  • Up to $100, if your net family income is more than $77,664

These numbers were taken from the 2009 CanLearn brochure on Education Savings for your child (www.canlearn.ca). The net numbers are adjusted yearly, so check with your service provider for the most up-to-date figures. 

If you are able to save more than $500 every year, the Canada Education Savings Grant can add up to $400 on the next $2,000 saved. The maximum lifetime grant the Government of Canada can give your child through the Canada Education Savings Grant is $7,200 per eligible child.

Your family income could qualify you to receive additional funds from the Canada Education Savings Grant. No matter what formula you choose, your lifetime limit remains $7,200 per eligible child. 

* If your net family income is below $39,065†, the grant will be 40% for every dollar on the first $500 you save and 20% of the next $2,000 in your child’s RESP each year. That means you could receive up to $600 in CESG per year.*

* If your net family income is between $39,065† and $78,130†, the grant will be 30% for every dollar on the first $500 you save and 20% of the next $2,000 in your child’s RESP each year. That means you could receive up to $550 in CESG per year.*

* Acknowledgement Heritage Education Funds Inc. 

The Canada Learning Bond

The Canada Learning Bond is a different option that is geared towards families who do not have a high enough income to contribute substantially to an RESP, but who would like to save for post-secondary education.

You are eligible for the bond if:

  • Your child was born after December 31, 2003; and
  • Your monthly Canada Child Tax Benefit payment includes the National Child Benefit Supplement. (www.canlearn.ca)

With this program, qualifying families receive a lump sum payment of $500 into their child’s RESP. Each year, another payment of $100 will be made automatically until the child is 15 or as long as you continue to receive the National Child Benefit Supplement. The total available to you could be up to $2000. You do not need to contribute any of your own money to get this bond. (www.canlearn.ca)

If your family income is less than $39,065 your child could receive additional funds through the Canada Education Savings Grant if you are able to make contributions to their RESP. The grant will provide 40% on every dollar on the first $500 you save and 20% on the next $2000 each year. This could mean up to $600 on Canada Education Savings Grant money every year.

For residents of Alberta and Quebec there are further options available through the Alberta Centennial Education Savings Grant or the Quebec Education Savings Incentive.

Sources:

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