Notice #903B – Questions and answers about the new Canada Learning Bond (CLB) Application for Adult Beneficiaries
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List of acronyms
- Canada Child Benefit
- Canada Education Savings Grant
- Canada Learning Bond
- Canada Revenue Agency
- Educational Assistance Payments
- Employment and Social Development Canada
- Interface Transaction Standards
- Primary caregiver
- Registered Education Savings Plan
Date: June 07, 2021
Subject: Questions and answers about the new Canada Learning Bond (CLB) application for adult beneficiaries
Questions and answers
Question 1. When does the new Adult CLB application form take effect?
Answer 1. The new application form takes effect as of January 1, 2022.
Question 2. Is the new Adult CLB application form the only acceptable application form for beneficiaries between 18 and 20 years of age?
Answer 2. Yes, beneficiaries who are between 18 and 20 years of age must use the new application form as of January 1, 2022.
Question 3. Is the new Adult CLB application form a stand-alone form?
Answer 3. Yes, the Adult CLB application form is a stand-alone form that beneficiaries between 18 and 20 years of age must use.
For beneficiaries under 18 years of age, the existing ‘APPLICATION: Canada Education Savings Grant (CESG) and Canada Learning Bond (CLB)’ must be used.
Question 4. Is Annex B required for beneficiaries between 18 and 20 years of age?
Answer 4. No, Annex B is not required for the CLB application process for beneficiaries between 18 and 20 years of age. It is not necessary to provide Employment and Social Development Canada (ESDC) with information about the custodial parent, primary caregiver (PCG) or the PCG’s cohabiting spouse or common-law partner for adult CLB applications.
Annex B is only used for applications for beneficiaries under 18 years of age, when the subscriber is not the PCG and/or the custodial parent.
Question 5. When can beneficiaries apply for the CLB for themselves?
Answer 5. Beneficiaries between 18 and 20 years of age can apply for the CLB using the new Adult CLB application form. They can apply for the CLB until the day before they turn 21 years of age.
At 18 years of age, the beneficiary must designate the trust using the new application form. If they are also the subscriber of the RESP, they will apply for the CLB using the same form. Section 3 must be left blank.
If, however, the subscriber of the RESP is not the same person as the adult beneficiary, the subscriber must authorize the RESP provider to ask the trustee to request the CLB in respect of the beneficiary. The subscriber would do so by completing Section 3.
Question 6. Can a PCG, their cohabiting spouse or their common-law partner submit an application for a beneficiary who is between 18 and 20 years of age?
Answer 6. No, the adult beneficiary must complete the new application form with the exception of Section 3, which the subscriber of the RESP must complete only when they are not the same person as the adult beneficiary.
The beneficiary may choose to designate an RESP for which the PCG, their cohabiting spouse or common-law partner is the subscriber; but at the age of 18, the PCG/spouse/partner is not required to be involved in the adult beneficiary’s RESP.
Question 7. Does the new Adult CLB application form need to be completed if the beneficiary is already receiving the CLB?
Answer 7. No, the form only needs to be completed if the CLB has not yet been applied for or received on behalf of the beneficiary.
Question 8. Are there any changes to the eligibility requirements for the CLB?
Answer 8. No, there are no changes to existing eligibility requirements for the CLB. The new application form was developed to fulfill the existing provisions of the Canada Education Savings Act included at the program’s inception in 2004.
Question 9. Are all individuals born on or after January 1, 2004, eligible to apply for the CLB?
Answer 9. Yes, this has not changed. The CLB is an education savings incentive for eligible individuals born on or after January 1, 2004. CLB-eligible children will begin to reach 18 years of age in 2022 and depending on the promoter’s age requirements for opening an RESP in their province or territory, should be able to apply for the CLB for themselves as per existing provisions of the Canada Education Savings Act.
Question 10. How will an adult beneficiary’s eligibility for the CLB be determined if the PCG’s, their cohabiting spouse’s or their common-law partner’s personal information is not required on the new Adult CLB application form?
Answer 10. Eligibility for the CLB is based on income information pertaining to the beneficiary’s PCG (or their cohabiting spouse or common-law partner). This information is obtained annually through an information-sharing process with the Canada Revenue Agency (CRA). The PCG consented to their information being shared by CRA with ESDC when they applied for the Canada Child Benefit (CCB). For children in care, the public primary caregiver is eligible to receive payments under the Children’s Special Allowances Act.
As the PCG has responsibility for decisions related to the minor beneficiary’s well-being, they have the authority to request the CLB and designate the RESP. At 18 years of age, this authority transfers to the beneficiary.
Adult beneficiaries who are between 18 and 20 years of age must use the new Adult CLB application form to request the CLB and/or to designate an RESP for CLB payment if the CLB has not already been requested for the beneficiary.
The CESP system will include functionality to match the adult beneficiary named on the CLB request to a child in the CRA data without the use of PCG information. ESDC will use the beneficiary’s name and date of birth to match them to their CLB amounts. If a match is found and all other rules are met, the CESP system will pay the CLB based on the number of CLB amounts the adult beneficiary has accumulated.
Question 11. If no CLB application was previously submitted for a beneficiary under 18 years of age, will a subscriber have to wait until the beneficiary turns 18 years old to apply?
Answer 11. No, the subscriber does not have to wait until the beneficiary turns 18 years of age to apply for the CLB.
However, for beneficiaries under 18 years of age, the existing ESDC application form for education saving incentives, the ‘APPLICATION: Canada Education Savings Grant (CESG) and Canada Learning Bond (CLB)’, must be used to apply for the CLB.
Question 12. Can adult beneficiaries apply for the CLB retroactively?
Answer 12. Yes, ESDC captures all eligible years of CLB amounts as they accumulate for each child, even when the child has not been named as the beneficiary of an RESP.
Ability to be a subscriber
Question 13. If an individual who is 18 years of age is unable to be an RESP subscriber due to minimum age requirements for opening an RESP, how can they apply for the CLB?
Answer 13. ESDC is aware of the potential for this scenario. There are no age restrictions on the subscriber in the Income Tax Act. However, the age at which a promoter permits an individual to be an RESP subscriber may be influenced by provincial age of majority and contract law considerations. For example, many promoters require an individual to meet the age of majority in their respective province in order to be a subscriber of an RESP, that is, some individuals who are 18 years of age are not able to open an RESP as the age of majority in their province is 19 years of age. The Canada Education Savings Act only requires that a beneficiary who is 18 years of age designate the RESP to receive their CLB, not that they be the subscriber.
It is possible for an adult beneficiary to designate an RESP to receive the CLB, for which another trusted adult or a child care agency (if the adult beneficiary is currently in care and has not aged out) is the subscriber. This would give the subscriber control over the release of Educational Assistance Payments (EAP) containing the CLB, but the adult beneficiary is free to make this choice. Alternatively, the adult beneficiary could open an RESP and apply for the CLB once they turn 19 years of age.
Question 14. Can an adult CLB application replace a previous RESP designation for CLB payments?
Answer 14. The adult beneficiary is required to designate the RESP for CLB payment at 18 years of age for any new CLB applications. If an adult beneficiary designates a different RESP to receive the CLB payments, the previous RESP becomes inactive for any future CLB payments for that beneficiary (for example, as a result of a CRA reassessment of family income). However, any CLB amounts paid for the beneficiary into the previous RESP would remain in that RESP.
Children in care
Question 15. Does the new Adult CLB application form also apply to individuals who are currently in care or who were previously in care of a public primary caregiver (department, agency or institution that received the allowance payable under the Children's Special Allowances Act)?
Answer 15. Yes, individuals between 18 and 20 years of age, and who were previously in care of a public primary caregiver can apply for the CLB using the new application form.
Individuals 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 primary caregiver is the subscriber. The public primary caregiver, as the subscriber, must complete Section 3 of the new application form.
Notification to parent or legal guardian
Question 16. Do promoters have to notify the parent or legal guardian if an 18-year-old individual who still lives at home, opens an RESP and names themselves as the beneficiary?
Answer 16. Yes, paragraph 146.1(2)(l) of the Income Tax Act states that as a condition of registration, “the plan provides that the promoter shall, within 90 days after an individual becomes a beneficiary under the plan, notify the individual (or, where the individual is under 19 years of age at that time and either ordinarily resides with a parent of the individual or is maintained by a public primary caregiver of the individual, that parent or public primary caregiver) in writing of the existence of the plan and the name and address of the subscriber in respect of the plan.”
This provision was intended to reduce the possibility of excess contributions being made in respect of a beneficiary. Since there can be multiple RESPs open for the same beneficiary, this ensures that at least one person is aware of all existing RESPs and can ensure that contribution limits are not exceeded.
CRA has confirmed that where an 18-year-old individual (who may or may not be the age of majority in their province) subscribes to an RESP and is the beneficiary, but ordinarily resides with a parent, the promoter must notify that parent of the plan and provide them with the 18-year-old individual’s address which would be the same as the parent’s.
As all conditions under 146.1(2) are conditions which must be complied with for the purpose of registration, if the promoter does not comply with any of these conditions, 146.1(12.1) authorizes CRA to send a notice of intent to revoke the registration of the plan.
Beneficiary is not the subscriber
Question 17. If the subscriber's authorization to request the CLB cannot be obtained, does this mean that the CLB cannot be applied for on behalf of the adult beneficiary?
Answer 17. Yes, the Canada Education Savings Regulations requires that as a condition for payment of the CLB, the application for the CLB is made by the trustee, at the request of a subscriber. If the subscriber’s authorization cannot be obtained, the adult beneficiary has the option to open a new RESP (depending on the promoter’s minimum age requirements for a subscriber to open an RESP in their province or territory) and apply for the CLB for themselves. There is also the possibility that an adult beneficiary could designate an RESP for which another trusted adult is the subscriber. This could give the subscriber control over the release of EAPs containing the CLB but the adult beneficiary is free to make this choice.
Question 18. Are there changes to the eligibility requirements for the CESG?
Answer 18. No, there are no changes to the existing eligibility requirements for the CESG. The CESG is available for contributions made until the end of the calendar year in which the beneficiary turns 17. Existing CESG eligibility restrictions are still in place for children who are 16 or 17 years old.
Question 19. If a subscriber opened an RESP but did not apply for the CLB when the beneficiary was a minor, does the promoter need to submit a different type of transaction request for the CLB when the beneficiary turns 18 years of age?
Answer 19. In this scenario, the adult beneficiary must designate the trust using the new application form. The subscriber would need to authorize the RESP provider to ask the trustee to request the CLB in respect of the beneficiary by completing Section 3. The existing CLB transaction will still be used except PCG information will no longer be required on this transaction if the beneficiary is 18 years of age or older at the time of the transaction.
Question 20. Will there be new refusal reasons created for adult CLB requests?
Answer 20. No, existing refusal reasons will be used for adult CLB applications.
Question 21. Will there be updates made to the Interface Transaction Standards (ITS)?
Answer 21. While there will be no updates made to the ITS, the PCG/Spouse notes will be expanded upon in the Record Type “400” section (7.6) to align with the PCG/Spouse field in the Record Type “400” Validation Rules section (7.6.1) to provide consistency.
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