InfoCapsule 11: The Canada Education Savings Grant
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The information contained on this page is technical in nature. It is intended for Registered Education Savings Plan (RESP) and Canada Education Savings Program promoters. For general information, visit the RESP page.
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Preface
Administered by Employment and Social Development Canada (ESDC), the CESG consists of:
- a basic amount (Basic CESG, introduced in 1998), and
- an additional amount of CESG (Additional CESG, introduced in 2005)
The CESG is paid on contributions made to a Registered Education Savings Plan (RESP) in respect of an eligible beneficiary.
Eligibility criteria
- The beneficiary has to be a resident in Canada at the time of the contribution and the withdrawal
- A valid Social Insurance Number (SIN) is required for the subscriber and the beneficiary
- In the case of the Additional CESG:
- a valid SIN is also required for the individual primary caregiver (PCG), their cohabiting spouse or common-law partner, if applicable
- a business number (BN) is required for a public PCG (department, institution or agency)
- Information on the individual PCG, their cohabiting spouse or common-law partner, or the public PCG, must be collected to request the Additional CESG
- Contributions must be made on or before December 31 of the calendar year in which the beneficiary turns 17
- Special conditions apply for the contributions made in respect of the beneficiary during the calendar year that a beneficiary turned 16 or 17 years old. One of the following conditions must apply before the end of the calendar year the beneficiary turned 15:
- a minimum of $100 in annual RESP contributions has been made (and not withdrawn) in any 4 years, or
- a minimum of $2,000 in contributions has been made (and not withdrawn)
CESG rates payable to an RESP in respect of a beneficiary
Basic CESG
The Basic CESG is payable at a rate of 20% on the first $2,500 or less of annual contributions.
If a beneficiary has accumulated grant room, the subscriber could catch up on these unused Basic CESG amounts by contributing more than $2,500 annually.
Note: The amount of annual Basic CESG payable per beneficiary is limited to the lesser of the following amounts:
- accumulated grant room available for the beneficiary, or
- the Basic CESG annual limit
Since 2007:
- the annual amount of Basic CESG (added to grant room) is $500
- the annual limit of Basic CESG is $500, or $1,000 with carry forward
- the amount of contributions required to receive the annual limit of Basic CESG is $2,500, or $5,000 with carry forward
Additional CESG
The Additional CESG is payable at a rate of 10% or 20% on the first $500 or less of annual contributions.
The rate (10% or 20%) is based on the PCG’s adjusted income level. Tax bracket thresholds are used to determine eligibility for the Additional CESG and the payable rate starting January 1 of each year.
For current income levels, refer to the Canada Revenue Agency’s tax bracket thresholds table. The table provides information about tax bracket thresholds for the last 4 tax years.
Rate of payment of 20%
The beneficiary could be eligible to receive an additional 20% on the first $500 or less of contributions. To do so, the PCG’s annual adjusted family income must be less than or equal to the amount listed in the first tax bracket of the tax bracket thresholds.
To verify eligibility for 20% on the first $500 or less of contributions, refer to the first row of the tax bracket thresholds table (first tax bracket) of the most recent tax year.
| PCG’s adjusted income level | Additional CESG payable rate |
|---|---|
| Less than or equal to the amount in the first tax bracket | 20% on the first $500 or less of contributions |
Rate of payment of 10%
If the PCG’s annual adjusted family income is greater than the amount listed in the first tax bracket and up to the amount listed in the second tax bracket, the beneficiary would be eligible to receive an additional 10% on the first $500 or less of contributions.
To verify eligibility for 10% on the first $500 or less of contributions, refer to the first 2 rows of the tax bracket thresholds table (first and second tax brackets) of the most recent tax year.
| PCG’s adjusted income level | Additional CESG payable rate |
|---|---|
| Greater than the amount in the first tax bracket and up to the amount in the second tax bracket | 10% on the first $500 or less of contributions |
The Additional CESG cannot be carried forward.
Note: The lifetime limit per beneficiary for the CESG (basic and additional combined) is $7,200.
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