Canada Education Savings Grant

Disclaimer: RESP promoters

The information contained on this page is technical in nature and is intended for Registered Education Savings Plan (RESP) and Canada Education Savings Program promoters. For general information, visit the RESP section.

Official title: Providing written notice to RESP beneficiaries when Educational Assistance Payments are made

Information Bulletin

Number:
CESG/SCEE-2003-004
Date:
September 12, 2003
Subject:
Notice #090 - Providing written notice to RESP beneficiaries when Educational Assistance Payments are made

The objective of this Information Bulletin is to review Registered Education Savings Plan (RESP) promoter's responsibilities to provide certain information in writing to the beneficiary when an Educational Assistance Payment (EAP) is made.

The current CESG Agreement with the Promoter, signed in 2002, included additional requirements surrounding the payment of EAP's, which are underlined below.

Paragraph 3.3(e) of the Canada Education Savings Grant Agreement with Promoter is as follows:

"The Promoter must, at the time of making the education assistance payment, provide to the beneficiary, in writing, notice of the beneficiary's obligation to repay to the Minister any CES grant received from all Promoters in excess of $7,200 and in relation to the RESP, provide in such notice a breakdown showing the amount of educational assistance payment attributable to the CES grant amount."

Providing Beneficiaries with Written Notice

The Canada Education Savings Grant (CESG) program asks promoters to provide written grant information to beneficiaries so that they can monitor the total grant they receive as Education Assistance Payments.

As you are aware, beneficiaries are not entitled to receive more than the lifetime limit of $7,200 in CES grant. If beneficiaries receive more than $7,200 in grant, CESG informs them, and collects the overpayment from the beneficiary directly. Grant overpayments are amounts owing to the government of Canada. They start accumulating interest as soon as they occur, so we ask promoters to notify beneficiaries of the amount of grant they are receiving at the time of each EAP.

Your organization can choose a method of notification as long as the notice is in writing, and made at the time of the EAP. Some best practices that we have noted are to include this notice on the EAP cheque stub, or in the letter that may be sent to a beneficiary when an EAP is made.

Background

Though CESG will not pay more than $7,200 into a RESP on behalf of a beneficiary, a beneficiary could have access to more than the lifetime limit if the child is a named as a beneficiary of a family or group plan, and if there are multiple promoters. Note that an individual promoter may not pay more than $7,200 in total grant to beneficiaries as part of their cumulative EAPs (CES Grant Regulation 9(1)).

Monitoring by CESG

The Canada Education Savings Grant Program will continue to verify through compliance reviews that written notice is being provided to beneficiaries when an EAP is paid.

Enquiries

Questions on this Information Bulletin should be directed to the CESG Program by e-mail at cesp-pcee@hrsdc-rhdcc.gc.ca, or by calling 1-888-276-3624.

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