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: Three Year Rule Date Clarification

Information Bulletin

Number:
CESP/PCEE-2008-004
Date:
May 28, 2008
Subject:
Notice #306 - Three Year Rule Date Clarification

Purpose

The purpose of this Information Bulletin is to inform financial institutions of a one-time administrative measure to resubmit transactions and to provide clarification to the calculation date regarding the 3 year rule.

Background

In January 2008 the CESP (Canada Education Saving Program) began rejecting the Canada Education Savings Grant (CESG), Canada Learning Bond (CLB) or Alberta Grant transaction dates exceeding the 3 year time limit. Contribution transactions submitted after the 3 year period are processed but receive a refusal reason of D or the 5033 Error (Late Transaction) and no basic, additional, provincial grant or CLB are paid on these transactions.

Details

The calculation of the 3 year rule compares the original Transaction Date and the Date Sent of the production file. (see examples below)

According to the ITS (Interface Transactions Standards)

  1. Transaction Date - The date on which the subscriber conducted the financial business with the promoter.
  2. Date Sent - The date the file was received by CESP. We will accept the last day of the month to the 4th business day of the following month, as the acceptable range in the production file.

Note: CESP will accept files anytime during the month provided that the Date Sent is the actual date the file is submitted to CESP. Furthermore, multiple files can be sent per month. However, the CESP system will only begin processing production files for the previous month starting after the 4th business day of the following month.

Examples

1: If your system only allows the production file to be submitted to CESP at the end of each month:

A transaction dated May 15, 2005 must be submitted (Date Sent) by April 31, 2008, in order to be processed successfully.

2: If your system allows the production file to be submitted to CESP multiple times during the month:

A transaction dated May 15, 2005 must be submitted (Date Sent) by May 15, 2008, in order to be processed successfully.

Notice

Since implementation of the 3 year rule in January 2008, it has come to our attention that some financial institutions interpreted the 3 year rule by comparing the original transaction date with the date they corrected the transaction in their system. As indicated above, the rule compares Transaction Date with the Date Sent therefore all transactions must be submitted to the CESP within 3 years of the original transaction date in order to be eligible for grant and/or bond.

Due to lack of clarity around these requirements, the CESP will provide promoters that received a Refusal Reason D or a 5033 error from January to June 2008 a one time opportunity to resubmit these transactions.

The CESP will provide affected promoters with a list of transactions that may be reversed and resubmitted. These transactions will be allowed as a one time submission. A file dated December 31, 2007, containing only these transactions will be accepted. This will include all affected transactions up to June 30, 2008.

All other transactions remain subject to the 3 year rule as outlined; the Date Sent must be within 3 years of the original Transaction Date to be eligible for grant and/or bond.

Legislative Authority

This 3 year timeframe is stipulated under the Canada Education Savings Regulations.

4(1) The Minister may pay a CES grant in respect of a contribution made to an RESP if...

(b) the trustee submits, at the request of a subscriber under the RESP, an application for the CES grant

(i) for a contribution made after 2004, within three years after the date of the contribution, and
(ii) for a contribution made before 2005, no later than December 31, 2007;

Questions

Questions on this Information Bulletin should be directed to the Canada Education Savings Program by e-mail at cesp-pcee@hrsdc-rhdsc.gc.ca or contact your promoter support officer.

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