Chapter 6. Registered Education Savings Plan provider user guide – The Canada Learning Bond

From: Employment and Social Development Canada

On this page

• Alternate format
• List of acronyms
• Introduction
• 6.1. The CLB – An overview
• 6.2. Eligibility criteria
• 6.3. Applying for the CLB
• 6.4. Receiving and depositing the CLB
• 6.5. Repaying the CLB
• 6.6. Other transactions involving the CLB

Alternate format

A PDF version of the Registered Education Savings Plan provider user guide is available on the index page.

List of acronyms

CCTB

Canada Child Tax Benefit

CESP

Canada Education Savings Program

CLB

Canada Learning Bond

CSAA

Children Special Allowances Act

EAP

Educational assistance payment

ESDC

Employment and Social Development Canada

NCBS

National Child Benefit Supplement

PCG

Primary caregiver

RESP

Registered Education Savings Plan

SIN

Social Insurance Number

UCCB

Universal Child Care Benefit

Introduction

The Government of Canada introduced the Canada Learning Bond (CLB) in 2004. This was introduced to provide an education savings incentive for children in low‑income families, and for children in care. Employment and Social Development Canada (ESDC) is responsible for the administration and delivery of this education savings incentive. Within ESDC, the Canada Education Savings Program (CESP) provides the delivery mechanism and necessary system supports for the effective administration of this education savings incentive.

The purpose of the CLB is to help residents of Canada to plan and save for a child’s post‑secondary education expenses by investing in a Registered Education Savings Plan (RESP).

RESP promoters must enter into agreements with ESDC to offer the CLB or any other education savings incentive administered by ESDC.

The CLB consists of:

• an initial CLB payment, and
• subsequent CLB payments

For more information, refer to Appendix C for a list of acronyms and terms used in this guide.

6.1. The CLB – An overview

The CLB is an education savings incentive for eligible children born on or after January 1, 2004:

• as of July 1, 2017, eligibility for the CLB is based, in part, on:
  • the number of qualified children, and
  • the adjusted income of the individual primary caregiver (PCG)
• for years prior to July 1, 2016, a child was eligible for the CLB if the individual PCG was in receipt of the National Child Benefit Supplement (NCBS) for that child
• from July 1, 2016, to June 30, 2017, a child was eligible for the CLB if the individual PCG had otherwise been in receipt of the NCBS for the child, had it continued to be paid for that period, or
• a child in care of a public PCG may be eligible for the CLB if the PCG is eligible to receive payments under the Children’s Special Allowances Act (CSAA) for that child

The CESP system tracks the CLB entitlements for an eligible child as they accumulate until an RESP is designated to receive the CLB for the child. While an RESP is required to receive the CLB, no contributions are required.

CLB entitlements include:

• an initial CLB payment of $500 for the first year the child is eligible, and
• subsequent CLB payments of $100 for each additional year of eligibility, up to and including the year in which the child turns 15

The total CLB amount paid into an RESP in respect of a beneficiary depends on the number of years that the beneficiary meets the eligibility criteria. However, the maximum lifetime CLB limit is $2,000 per beneficiary.

Children named as an RESP beneficiary can ultimately use the CLB amounts paid to their RESP. It will help offset their costs of post‑secondary education with educational assistance payments (EAPs).

As of January 1, 2022, Canada Learning Bond (CLB) eligible individuals will start to turn 18 years old, at which point they will be able to designate an RESP themselves to receive their CLB.

However, in certain provinces and territories, the legal age at which an individual can enter into a contract (which includes opening an RESP) is 19.

To determine at which age individuals may open an RESP as the subscriber, promoters should consider the following:

• applicable provincial/territorial laws
• their organization’s operational requirements
• any flexibility they may have introduced

In situations where the promoter requires the subscriber to be 19 years of age or older, there are 2 options:

• the CLB eligible beneficiary may choose to wait until they turn 19 to open their own RESP
• designate an RESP with a trusted adult as the subscriber

6.2. Eligibility criteria

To determine if the beneficiary is eligible for the CLB, the following eligibility criteria should be considered:

• is the beneficiary currently a resident of Canada?
• was the beneficiary born in 2004 or later?
• does the beneficiary have a valid Social Insurance Number (SIN)?

And

• for benefit years beginning on July 1, 2017, was the individual PCG’s adjusted income:
  • for PCG’s with up to 3 qualified children, less than or equal to the lowest income tax threshold, or
  • for PCG’s with more than 3 qualified children, less than the amounts determined by the formula in the Canada Education Savings Act?
• for benefit years prior to July 1, 2016, was the individual PCG in receipt of the NCBS for the child?
• from July 1, 2016, to June 30, 2017, would the individual PCG have been in receipt of the NCBS for the beneficiary if it had continued to be paid for that period?

Or

• did the public PCG receive payments under the CSAA for a child in care, for at least one month of the benefit year?

6.2.1. Information required to request the CLB

Beneficiaries under 18 years of age

The CESP system requires PCG information or, as of January 1, 2018, that of their cohabiting spouse or common‑law partner, if applicable. This information helps to validate the beneficiary’s eligibility for the CLB with the Canada Revenue Agency (CRA). The RESP promoter submits the CLB request for a beneficiary to the CESP system using the application form ESDC SDE 0093. The information provided with that request is used to assess the beneficiary’s CLB eligibility at that time.

Adult beneficiaries between 18 and 20 years of age

As of January 1, 2022, the RESP promoter submits the CLB request for adult beneficiaries between 18 and 20 years of age to the CESP system. They use the information from the application form ESDC SDE 0107. The PCG information or their cohabitation spouse or common‑law partner is not needed to apply for the CLB for adult beneficiaries.

The CESP system then continues to automatically validate eligibility for a beneficiary’s subsequent CLB entitlements each year using the same information. However, if the CESP system receives a more recent CLB request with new information, it will then cancel the old one and use the information of the new request.

For more information about multiple CLB requests for the same beneficiary, refer to 6.2.4. Designating an RESP for the CLB payments.

6.2.1.1. Individual PCG

A person is the individual PCG of a beneficiary if they are eligible to receive the Canada child benefit (CCB) for the beneficiary. A beneficiary could have more than one individual PCG if 2 people, who do not live together, share custody of the beneficiary. For more information, refer to 6.2.5. Shared custody.

The CCB is a tax‑free monthly payment made to eligible families. This helps them with the cost of raising children under the age of 18. To be eligible to receive the CCB, it is necessary to complete an application form with the CRA. Budget 2016 announced the creation of the CCB. It replaced the Canada Child Tax Benefit (CCTB), the NCBS and the Universal Child Care Benefit (UCCB):

• as of July 1, 2017, you can find the eligibility criteria for the CLB within the Canada Education Savings Act. The new eligibility requirements are similar to the NCBS. The new eligibility requirements are also based, in part, on the number of qualified children and the adjusted income of the individual PCG
• for the 2016 to 2017 benefit year, eligibility for the CLB was based on whether the individual PCG would have been in receipt of the NCBS for the child, had it continued to be paid for that period
• until June 2016, the CLB was payable for a beneficiary in respect of whom the NCBS was payable. The NCBS was based, in part, on the number of qualified children and the adjusted income of the individual PCG. With the introduction of the CCB, an amendment to the eligibility criteria for the CLB was required

For beneficiaries under 18 years of age, an individual PCG (or their cohabiting spouse or common‑law partner) must provide their name and SIN on the application form ESDC SDE 0093.

The information about the custodial parent, PCG or the PCG’s cohabiting spouse or common‑law partner is not required for the CLB application process for adult beneficiaries between 18 and 20 years of age on the application form ESDC SDE 0107.

The following information is then used to validate a beneficiary’s eligibility for the CLB:

• the adjusted income of the beneficiary’s individual PCG
• the number of qualified children associated with the PCG

The CRA calculates an individual PCG’s adjusted income using, in part, their net income reported on line 23600 of tax returns filed. The CRA also takes into consideration the tax return of their cohabiting spouse or common‑law partner, if applicable.

For more information about the CCB, the CCTB, or the NCBS, call the CRA at 1‑800‑387‑1193 or visit the following CRA Web site.

6.2.1.2. Public PCG

A payment under the Children’s Special Allowances Act (CSAA) is a tax‑free monthly payment for a child who is under the age of 18. The child needs to physically reside in Canada, and needs to be under the care of an organization.

An organization is the public PCG of a beneficiary if it is entitled to receive payments for the beneficiary under the CSAA.

Children in care of public PCG may be eligible for the CLB. A public PCG must provide their business number (BN) on the application form ESDC SDE 0093 to request the CLB in respect of a beneficiary.

Beneficiaries between 18 and 20 years of age, and who were previously in care of a public PCG can apply for the CLB using the application form ESDC SDE 0107. Beneficiaries who are 18 years of age but have not yet aged out of care (depending on their province of residence) may choose to designate an RESP to receive the CLB for which a public PCG is the subscriber. The public PCG, as the subscriber, must complete section 3 of the application form ESDC SDE 0107.

6.2.2. Types of RESPs and the CLB

To receive the initial and subsequent CLB payments for eligible beneficiaries, the RESP must be:

• an individual (non‑family) plan, or
• a family plan in which all beneficiaries are siblings

6.2.3. CLB entitlements, earnings and the RESP

No interest will be paid on the CLB entitlements that have not been paid into an RESP by the Government of Canada.

Therefore, we encourage subscribers to complete the necessary steps, such as opening an RESP and applying for the CLB for the beneficiary. Once paid into an RESP, the CLB and any other savings contributed to the RESP will likely grow over time and accumulate earnings.

6.2.3.1. CLB timeline

Child’s birth to age 18: The subscriber opens an RESP in the beneficiary’s name. The PCG (or an individual PCG’s cohabiting spouse or common‑law partner if applicable) must designate the RESP that will receive the CLB payments.

Between 18 and 20 years of age: The adult beneficiary is required to designate the RESP to receive in trust the CLB payments that have not yet been received. This is the case whether or not they are also the subscriber of the RESP.

Age 21 or older: In most cases, any unclaimed CLB amounts which have not been paid into an RESP are forfeited.

6.2.4. Designating an RESP for the CLB payments

For beneficiaries under 18 years old, their PCG or, as of 2018, an individual PCG’s cohabiting spouse or common‑law partner (if applicable) must designate the RESP to receive, in trust, the CLB payments for the beneficiary. To do so, they must complete the application form ESDC SDE 0093.

For adult beneficiaries between 18 and 20 years of age, the beneficiary must designate the RESP to receive, in trust, any payments of the CLB as applicable. To do so, they must complete the application form ESDC SDE 0107. For more information, refer to Appendix A. Application Forms – Education Savings Incentives.

Only one RESP can be designated to receive the CLB payments at any given time for a beneficiary. However, the individual who has authority to designate can select a different RESP into which future CLB payments will be deposited. They would do so by completing a new application form ESDC SDE 0093 or ESDC SDE 0107 as applicable.

A different RESP can be designated to receive the CLB payments for a beneficiary. However, the previous RESP becomes inactive for any future CLB payments of that beneficiary. Any CLB amounts paid for the beneficiary into the previous RESP would remain in that RESP.

To request the CLB and designate an RESP to receive the corresponding future CLB payments in respect of a beneficiary, RESP promoters must submit an electronic transaction (400‑24) to the CESP system. For beneficiaries under 18 years of age, this transaction must include the required information for the PCG (or the individual PCG’s cohabiting spouse or common‑law partner, if applicable) provided on the application form ESDC SDE 0093. For beneficiaries between 18 and 20 years of age applying for the CLB with form ESDC SDE 0107, this information is not required. The CESP system uses information provided in the most recent CLB request. This will allow the system to validate a beneficiary’s eligibility for the CLB in the designated RESP each year.

6.2.4.1. Stopping future CLB payments after terminating a RESP

If an RESP is terminated, the RESP promoter must ensure that future CLB payments to that RESP have been stopped.

Promoters will stop CLB payments for a particular beneficiary in an RESP by submitting a CLB request transaction “400‑24” for the beneficiary with the “grant requested” field set to “0” (No). The promoter must submit a transaction for each beneficiary for whom there is an active CLB request in the terminated RESP.

For additional information, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards.

6.2.5. Shared custody

Only one person is eligible to receive the CCB for a beneficiary at any given time. This applies in cases where a beneficiary is cared for by an individual PCG and their cohabiting spouse or common‑law partner.

However, if 2 individuals do not live together, but care for and share the custody of the beneficiary, they may share the CCB payments. In these situations, they may both be an individual PCG of the beneficiary at the same time.

In this example, eligibility for Natasha’s accumulated CLB entitlements would have been validated for the CLB request on March 7, 2017, using Robert’s information as Natasha’s individual PCG. RESP “A” would have been the designated RESP for Natasha’s CLB payments at that time.

On May 10, 2018, Natasha’s CLB request for RESP “B” was submitted to the CESP system. RESP “B” became the active RESP for Natasha’s CLB payments after that date. This new CLB request also made RESP “A” inactive for Natasha’s CLB payments as of that date.

Eligibility for Natasha’s CLB payment into RESP “B” in 2018 (normally in July) would be validated using Sarah’s information as the individual PCG. RESP “B” will remain the active RESP for Natasha’s CLB payments unless the CESP system receives a new request. RESP “B” will receive these payments if Sarah satisfies the CLB eligibility requirements.

6.2.6. Tracking CLB entitlements for an eligible beneficiary

ESDC and the CRA share information to confirm a beneficiary’s eligibility for the CLB. ESDC tracks the amount of accumulated CLB entitlements for the child until a subscriber opens an RESP and name the child as a beneficiary. The CLB entitlements only accumulate during the years in which the PCG satisfies the CLB eligibility criteria. For more information, refer to section 6.2. Eligibility criteria.

The following chart illustrates how the CLB entitlements are tracked for an eligible child. This also demonstrates how it is paid once a subscriber opens an RESP for them and requests the CLB.

During the application process, the beneficiary’s PCG (or, as of 2018, the PCG’s cohabiting spouse or common‑law partner, if applicable) must designate the RESP into which the CLB entitlements will be paid if the beneficiary is under 18 years old. For beneficiaries between 18 and 20 years old, they can designate the RESP into which the CLB entitlements will be paid. In this example, the beneficiary was born in 2007 but the subscriber did not open the RESP until 2016.

Table 2: Tracking and paying the CLB entitlements

Year	Eligible for initial or subsequent CLB	Amount of the CLB entitlement	Amount of the CLB paid into RESP	Amount of accumulated CLB entitlement
2007	Initial CLB	$500	$0	$500
2008	Subsequent CLB	$100	$0	$600
2009	Subsequent CLB	$100	$0	$700
2010	Not eligible	$0	$0	$700
2011	Not eligible	$0	$0	$700
2012	Subsequent CLB	$100	$0	$800
2013	Subsequent CLB	$100	$0	$900
2014	Subsequent CLB	$100	$0	$1,000
2015	Subsequent CLB	$100	$0	$1,100
2016 Footnote 1	Not eligible	$0	$1,100 (total CLB: from 2007 to 2015)	$0
2017	Not eligible	$0	$0	$0
2018	Subsequent CLB	$100	$100	$0
2019	Subsequent CLB	$100	$100	$0
Total	n/a	$1,300	$1,300	$0

6.3. Applying for the CLB

The application process for the CLB includes the participation of the following:

• for beneficiaries under 18 years old:
  • the RESP promoter
  • the subscriber
  • joint subscriber, if applicable
  • a custodial parent or legal guardian, if applicable
  • the PCG or their cohabiting spouse or common‑law partner, if applicable
• for beneficiaries between 18 and 20 years old:
  • the RESP promoter
  • the beneficiary, who may also be the subscriber
  • the subscriber, if different from the beneficiary
  • joint subscriber if applicable

The following subsection provides an overview of the application process.

6.3.1. For beneficiaries under 18 years of age

1. The subscriber approaches an RESP promoter authorized to offer the CLB. They open the ESP, name a beneficiary and request the registration of the ESP
2. The promoter establishes the ESP, making sure to obtain the SINs for:
   • the subscriber, and
   • the beneficiary

3. The promoter reviews the eligibility criteria with the subscriber to determine whether the beneficiary is eligible for the CLB. For more information, refer to 6.2. Eligibility criteria
4. The promoter ensures that the subscriber completes the appropriate application form(s) ESDC SDE 0093 and ESDC SDE 0093‑B Annex B – PCG/parent if applicable
5. The promoter processes the application form according to established procedures
6. The promoter submits information to the CESP system
7. The CESP system calculates and pays the CLB

To view detailed instructions for completing this form(s), refer to Appendix A. Application forms – Education Savings Incentives.

6.3.2. For beneficiaries between 18 and 21 years of age

1. The adult beneficiary approaches an RESP promoter authorized to offer the CLB. The beneficiary as the subscriber can apply for the CLB for themselves. When the beneficiary is not the subscriber; depending on the promoter’s minimum age requirements for a subscriber to open an RESP in their province or territory, there is also the possibility that an adult beneficiary could designate an RESP for which another trusted adult is the subscriber
2. The promoter establishes the ESP, making sure to obtain the SIN for the beneficiary
3. The promoter reviews the eligibility criteria with the beneficiary. For more information, refer to 6.2. Eligibility criteria
4. The promoter ensures that the beneficiary complete and sign application form ESDC SDE 0107
5. The promoter processes the application form according to established procedures
6. The promoter submits information to the CESP system
7. The CESP system calculates and pays the CLB

Use the following post‑application checklist to provide the subscriber with some helpful reminders.

6.3.3. Post‑application checklist

• Confirms all information the CESP application form is accurate
• Remind the subscriber that the CLB is beneficiary‑specific. They cannot share the CLB with other beneficiaries in the plan
• If the subscriber is not the beneficiary’s parent or legal guardian, the RESP promoter must notify the parent or legal guardian that a plan is open. The RESP promoter must do so within 90 days that an ESP is open
• Advise subscribers that the RESP promoter will notify them when they receive and deposit a payment of the CLB into the RESP

6.4. Receiving and depositing the CLB

Once RESP promoters receive a CLB payment from ESDC, they are responsible for:

• depositing the payment into the appropriate RESP, and
• accounting for the payment in the beneficiary’s CLB notional account

6.4.1. Sharing the CLB and earnings – Family and group plans

The CLB is an incentive that is directed to a specific eligible beneficiary. As such, there are restrictions on the sharing of the CLB and associated earnings in the RESP.

As long as the beneficiary meets the requirements for the EAP, the promoter can use the CLB and earnings in an EAP for the eligible beneficiary of the RESP.

The following table identifies that beneficiaries cannot share the CLB but the situation can be different with the earnings.

Table 3: Sharing the CLB and earnings – Family and group plans

Incentives	Family plans	Group plans
CLB	You cannot share the CLB; it is directed to a specific eligible beneficiary.	You cannot share the CLB; it is directed to a specific eligible beneficiary.
Earnings	The beneficiary’s sibling(s) can share earnings if they are named as beneficiaries of the family plan.	You cannot share the earnings on the CLB with beneficiaries in the group plan.

6.4.2. Reasons for non‑payment of the CLB

To ensure that RESPs receive all of the CLB payments in respect of eligible beneficiaries, the RESP promoter must ensure that:

• the appropriate application form is complete and accurate. For more information, refer to Appendix A. Application forms – Education Savings Incentives, and
• submit the information collected on this form, along with other required information, to the CESP system via an electronic transaction. This transaction must pass the required validation for the formatting and business rules specified in the CESP Interface Transaction Standards

The CESP system acknowledges a successfully processed CLB request by sending the RESP promoter a record in their monthly transaction processing report. This record will include the amount of the CLB that will be paid.

There may be situations in which the CESP system will not pay the CLB. The CESP system will send reports to the RESP promoter if:

• a request for the CLB is rejected, or
• a request for the CLB is refused

For more information about the information exchanged between the RESP promoters and the CESP system, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards.

6.4.2.1. When requests for the CLB are rejected with an error code

If a request for the CLB contains an error (example: the electronic transaction has an error in formatting), the CESP system will reject the transaction with an error code. The CESP system generates monthly error reports and RESP promoters are responsible to make the necessary corrections for these rejected transactions.

For more information about error codes, refer to Appendix E. Understanding error codes.

6.4.2.2. When requests for the CLB are processed with a refusal reason

The CESP system may successfully process a CLB requests but it may refuse to make a payment. This would occur if one or more of the CLB business rules are not satisfied.

The CESP system informs RESP promoters when a CLB request has been successfully processed with a refusal reason in their monthly transaction processing report.

For more information about refusal reasons, refer to Appendix F. Understanding refusal reasons.

6.5. Repaying the CLB

Certain circumstances require a repayment of the CLB.

6.5.1. Repayment process

The RESP promoter must:

1. recognize and identify circumstances that require a CLB repayment
2. determine the CLB amount to repay, and
3. submit the required financial transaction(s) to the CESP system, indicating the repayment amount and the reason for repayment. For more information, refer to section 6.5.4. Submitting repayment information to the CESP system

6.5.2. Repayment circumstances

The RESP promoter must repay the CLB in an RESP under the following circumstances:

• the termination of the RESP
• CRA revokes the registration for the RESP
• the promoter makes an accumulated income payment (AIP)
• the promoter makes a payment to a designated educational institution
• the promoter makes an EAP to an individual who is not a beneficiary of the RESP
• an ineligible transfer occurs
• an ineligible beneficiary replacement occurs
• the promoter adds a beneficiary who is not a sibling to a sibling‑only RESP into which the CLB has been paid
• the beneficiary, for whom the CLB was paid into the RESP, ceases to be a beneficiary of the RESP (example: deceased)

Promoters initiate a CLB repayment from an RESP by submitting a transaction to the CESP system. They will indicate the amount of the CLB to repay and the repayment reason. The CESP system makes monthly direct deposits for each promoter. This includes all incentive payments made for all successfully processed transactions submitted by the promoter in the previous month. The CESP system subtract all repayment amounts for the previous month from the amount that would normally be payable to promoters in their next direct deposit. For more information, refer to section 6.5.4. Submitting repayment information to the CESP system.

6.5.3. Determining the repayment amount

If the promoter repays the CLB from an RESP for any of the reasons identified in section 6.5.2. Repayment circumstances (except when a beneficiary ceases to be a beneficiary), the amount to repay is equal to the lesser of:

• the balance of all CLB notional account(s) for the RESP beneficiaries immediately before the occurrence, and
• the fair market value of the property held in the RESP, immediately before the occurrence

6.5.4. Submitting repayment information to the CESP system

The RESP promoter must submit the following transaction to the CESP system to repay the CLB:

• record type “400”, transaction type “21” (grant repayment)

This transaction identifies the repayment reason using one of the following codes:

• 02: AIP (accumulated income payment)
• 03: Contract termination
• 04: Ineligible transfer
• 05: Ineligible beneficiary replacement
• 06: Payment to an educational institution
• 07: Revocation (of plan)
• 08: Ceases to meet sibling‑only condition
• 09: Deceased (beneficiary)
• 11: Other
• 12: Non-resident

For more detailed information about how transactions are processed between the RESP promoter and the CESP system, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards.

6.5.5. How funds are used to repay the CLB

The repayment transactions submitted to the CESP system will vary. It will depend on whether or not there are sufficient funds in the RESP at the time repayment is required.

6.5.5.1. When sufficient funds exist in the RESP

If there are sufficient funds in the RESP, the RESP promoter will repay the CLB and any other incentives from the corresponding notional account(s).

In this example, the RESP promoter would withdraw the funds from the RESP and submit the following repayment transaction to CESP:

• “400‑21” (03) CLB repayment transaction with a reason code of (03), contract termination, with $300 in the CLB amount field and $3,600 in the CESG amount field

Note: The promoter must also repay the CESG because the plan is being terminated.

6.5.5.2. When insufficient funds exist in the RESP and the plan is terminated

When a promoter terminates a RESP, they must repay the balance of all CLB notional accounts. They must also repay any other federal and provincial education savings incentives in the RESP.

Sometimes, the RESP has experienced a loss and there are insufficient funds to cover the total amount of the CLB (or other education savings incentives) repayable. When that happens, the RESP promoter must submit a termination adjustment transaction to the CESP system to advise them of the shortfall.

Losses are first attributed to earnings, and then to contributions. Once these notional accounts are depleted, any remaining losses are apportioned equally across the federal and provincial education savings incentives that are remaining in the RESP.

Promoters must use a formula to repay the federal education savings incentives in cases where the fair market value is less than the total of the balance of the CESG and the CLB.

The list of events that triggers repayments when there is a significant investment loss in an RESP is described in the Canada Education Savings Regulations, subsection 11(3).

Formula to repay the federal education savings incentives in cases where the fair market value is less than the total of the balance of the CESG and the CLB

The following example illustrates how the RESP promoter will determine the amount and repayment transaction that he must submit to the CESP system. For this example, the CLB and the CESG have been paid into the RESP.

In this example, the total amount of incentives that would normally be repayable ($800 + $1,200 = $2,000) exceeds the market value of the RESP ($1,500). Therefore, the following calculations are required to determine the actual repayable amount for each incentive:

Based on the federal education savings incentives repayment formula, the RESP promoter must repay the total of $1,500 in CESG and CLB.

($1,500 × $2,000) / ($2,000 + $0) = $1,500

The following calculations are required to determine the proportion of CESG and CLB to be repaid to ESDC:

1. determine the remaining amount of incentives in the RESP:
   • $800 (CLB) + $1,200 (CESG) = $2,000
2. determine the percentage represented by each incentive amount in the RESP:
   • CLB / total value of incentives = % of CLB
   • $800 / $2,000 = 40%
   • CESG / total value of incentives = % of CESG
   • $1,200 / $2,000 = 60%
3. apply these percentages to the RESP market value of $1,500:
   • market value × % of CLB = CLB repayable
   • $1,500 × 40% = $600
   • market value × % of CESG = CESG repayable
   • $1,500 × 60% = $900

Note: If more than one federal or provincial incentive is remaining in the RESP, the promoter must determine the proportion of each incentive to repay.

The promoter will use the following transaction to submit repayment information:

• “400‑21” (03) CLB repayment transaction with a reason code of (03), contract termination, with $600 in the CLB amount field and $900 in the CESG amount field

Next, it will be necessary to determine the shortfall and submit the appropriate termination adjustment transaction to the CESP system.

To determine the shortfall:

Total value of incentives – repayment amount = adjustment

CLB: $800 – $600 = $200

CESG: $1,200 – $900 = $300

The RESP promoter must also send a termination adjustment transaction to inform the CESP system of the shortfall, but only when the RESP is terminated. This termination adjustment transaction will account for the difference of $500.

The promoter will use the following transaction to submit this information:

• “400‑22” Termination adjustment transaction, identifying: $200 as the amount of the shortfall applied to the CLB. $300 as the amount of the shortfall applied to the CESG

Even if the CLB repayment is $0, as a result of losses in RESP earnings, contributions, and incentives, the repayment transaction must still be reported to the CESP system.

6.6. Other transactions involving the CLB

The RESP promoter may also be asked to handle other transactions involving the CLB. These include:

• transferring funds (including the CLB) from one RESP to another

For more information, refer to Chapter 9. Registered Education Savings Plan transfers and the education savings incentives.

• responding to a request for an EAP and calculating the CLB portion of the EAP

For more information, refer to Chapter 10. Post‑secondary education and educational assistance payments.