Notice #925 – Transaction dates for Canada Learning Bond (CLB) requests for adult beneficiaries

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Information bulletin

Number: CESP/PCEE-2021/22-008-925
Date: December 09, 2021
Subject: Transaction dates for Canada Learning Bond (CLB) requests for adult beneficiaries

Previous bulletins

This notice follows information bulletins #903A, #903B and #913.

Purpose

To provide promoters with guidance on the acceptable use of transaction dates for CLB requests for adult beneficiaries.

Background

The new CLB application process for adult beneficiaries comes into effect on January 1, 2022.

Beneficiaries between 18 and 20 years of age can apply for the CLB and designate a Registered Education Savings Plan (RESP) for payment of unpaid CLB amounts.

It is the beneficiary’s age on the date of the CLB request that determines the appropriate authority for the designation of the RESP:

There will also be cases where transactions occur before the beneficiary turns 18 but carry over past their 18th birthday due to an error or refusal. If promoters can resolve the error or refusal within 3 years as per the three-year rule, Employment and Social Development Canada (ESDC) will accept the request with the PCG’s designation even if the beneficiary has turned 18.

Legislative authority

The Canada Education Savings Act requires beneficiaries, at 18 years of age, to designate the RESP that will receive the CLB payment.

6 (4) The amount of a bond in respect of a benefit year is to be paid to the trustee of a trust designated, in the form and manner approved by the Minister, by the primary caregiver of the beneficiary, the primary caregiver’s cohabiting spouse or common-law partner or, if the beneficiary is 18 years of age or more, the beneficiary.

Acceptable use of transaction dates

A transaction to request the CLB must be supported by a designation made by the appropriate authority. This is done by ensuring the correct application form is completed:

  1. the transaction date for CLB requests must be the date of the CLB application (the date the subscriber signed the application)
  2. the three-year rule applies to CLB requests made prior to the beneficiary turning 18 that remain in error or refusal past their 18th birthday:
    1. If the beneficiary was under 18 at the time of the original request, and they turn 18 before the three-year period is exceeded:
      • you can resubmit correcting information using the original transaction date that is within 3 years of the file submission date
      • you do not need a new CLB application form
      • this recognizes the authority of the PCG to designate the RESP before the beneficiary turns age 18
    2. If a CLB request exceeds the three-year period and the beneficiary is now 18 years of age:
      • you must send a new request with a current transaction date
      • the new request must be supported by a designation by the adult beneficiary using the new adult CLB application form
      • this recognizes the authority of the beneficiary at age 18 to designate the RESP for their CLB payment
  3. if a transaction date is on or after the beneficiary’s 18th birthday, it must be supported by a designation by the adult beneficiary
    • the new adult CLB application form must be used

Example for three-year rule

Scenario: three-year rule

Resolution

The promoter fixes the error and resubmits the transaction using the original transaction date.

Explanation

The promoter must not change or alter the transaction date(s) because the transaction already exists (it occurred upon completion of the CLB application form). The original transaction date is before the beneficiary turns 18. The Canada Education Savings Program’s system will process the transaction as an under-18 CLB request, which requires PCG information.

The promoter has 3 years from the original transaction date to fix the error. The three-year rule compares the transaction date of the CLB request to the file sent date of the file containing the transaction.

If the original transaction date is more than 3 years old, a new request is needed with a current transaction date. If the beneficiary is 18 years of age or older, the new adult CLB application form must be used.

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