RESP

Any parent who had sent their son or daughter to university is aware of the high cost of education. It is estimated that in cost of post secondary education will be over $100000 in coming 10 yrs. This cost will vary based on the university students attend and the program they are enrolled in.

Registered Education Saving Plan is the saving plan that has been registered with Canada Revenue Agency. Government provides incentive to parents (Subscriber) to accumulate money for their children’s (Beneficiary) future by providing Canadian Education Saving grant.

Contribution made by subscriber is not tax deductible. Income earned in an RESP grows tax free until it is used for education when income and grants become taxable to a qualified student.Because students usually have little or no income, and are often eligible for certain tax deduction, they typically pay little or no tax on RESP Income.

Parent, Grandparent, Aunt , uncle, anyone can start saving money in the plan for children for post secondary education.

It is affordable for most families to make small payment every month by automatic monthly Payment Plan. There are other options available as well by RESP providers. You should check with your RESP provider about payment options.

Since 2007 there has been no annual limit for contribution to RESPs, but there is life time limit on contribution to all RESPs for each beneficiary of %50,000.

Government Grant: 

Basic Registered Education Saving Grant provided by the Federal Government is 20% on the contribution made by subscribers (parent, Grandparent etc) with maximum limit of $500 annual CESG.

For example: You will receive $500 in Basic CESG on your first $2500 of contribution. Grant will be $500 annual even if your contribution is $5000.

Additional CESG: 

Additional CESG is available since January 1, 2005 is based on family’s net income of the nominee. Family net income of the nominee for 2009 of $38,831 and less receives 20% additional CESG on up to first $500 of RESP contributions

Family net income of the nominee for 2009 of $38,832 to $77,663 of family net income receives 10% on up to first $500 RESP contributions.

Additional allocation is part of the total CESG maximum of $7200 per child. The family net income qualification is updated every year.

Canada Learning Bond:

Is Available to children born on or After January1, 2004.  Nominee’s family must receive National Child Supplement to qualify for Canada Learning Bond. $500 is available for the first year and $100 for every following eligible year to age 15

Maximum grant available is $7200 and can be $9200. Amount of addition grant availability depends on the annual income of the family.

You check with your RESP provider for the investment options they offer for your RESP contribution and grants.You may have various options and you can choose investment vehicle based on your risk tolerance.

Call (905) 568-1676 or email to get Free Brochure of RESP.