Chapter 10. Registered Education Savings plan provider user guide – Post-secondary education and education assistance payment
From: Employment and Social Development Canada
Disclaimer: RESP promoters
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 section.
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A PDF version of the Registered Education Savings Plan provider user guide is available on the index page.
List of acronyms
- BCTESG
- British Columbia Training and Education Savings Grant
- CBA
- Canadian Banker’s Association
- CESG
- Canada Education Savings Grant
- CESP
- Canada Education Savings Program
- CLB
- Canada Learning Bond
- CRA
- Canada Revenue Agency
- EAP
- Education assistance payment
- ESDC
- Employment and Social Development Canada
- FMV
- Fair market value
- IDA
- Investment Dealers Association
- IFIC
- Investment Funds Institute of Canada
- ITA
- Income Tax Act
- ITS
- Interface Transaction Standards
- PSE
- Post-secondary education
- QESI
- Quebec Education Savings Incentive
- RESP
- Registered Education Savings Plan
- RESPDAC
- Registered Education Savings Plan Dealers Association of Canada
- SAGES
- Saskatchewan Advantage Grant for Education Savings
Introduction
An educational assistance payment (EAP) is a payment from a Registered Education Savings Plan (RESP) to an eligible beneficiary. Its purpose is to help cover expenses associated with post‑secondary education. An EAP consists of educational incentive amounts paid into a RESP, as well as the income earned on contributions and incentive amounts. The education savings incentives currently administered by Employment and Social Development Canada (ESDC) include:
- Canada Education Savings Grant (CESG)
- Canada Learning Bond (CLB)
- Saskatchewan Advantage Grant for Education Savings (SAGES)
- British Columbia Training and Education Savings Grant (BCTESG)
To be eligible for an EAP, the beneficiary must be enrolled in a qualifying educational program at a post‑secondary educational institution.
For more information, refer to Appendix C for a list of acronyms and terms used in this guide.
10.1. Defining post‑secondary education
When RESP beneficiaries are ready to attend post‑secondary education, they may qualify for EAPs to help pay for related educational expenses.
In order to be eligible for an EAP:
- a beneficiary must be enrolled full‑time or part‑time (in‑class or distance learning)
- in a qualifying educational program at a post secondary educational institution
Qualifying “post-secondary educational programs” and “post‑secondary educational institutions” are defined by the Canada Revenue Agency (CRA).
Post‑secondary level, a qualifying educational program must be at the post‑secondary level for EAP purposes. A post‑secondary course usually provides credit towards a degree, diploma, or certificate.
10.1.1. Qualifying educational programs – Full‑time studies
For EAP purposes, full‑time studies (qualifying educational programs) require at least 10 hours of instruction or work each week for the duration of the program.
Instruction or work includes all forms of direct instruction, such as lectures, practical training, laboratory work, or time spent on research for a thesis.
The minimum course duration for full‑time studies depends on the type of program and whether or not the educational institution is in Canada. As shown in the table below.
| Type of educational institution | Location of educational institution | Minimum duration of a course (consecutive weeks) |
|---|---|---|
| Universities | In Canada | 3 weeks |
| Universities | Outside of Canada | 3 weeks |
| Other post‑secondary educational institutions | In Canada | 3 weeks |
| Other post‑secondary educational institutions | Outside of Canada | 13 weeks |
10.1.2. Specified educational programs – Part‑time studies
As of 2007, a payment may also qualify as an EAP at the time it is made:
- if the beneficiary is at least 16 years old, and
- is enrolled part‑time as a student in a specified educational program
A specified educational program is a program at post‑secondary school level that is:
- at least 3 consecutive weeks duration
- requires each student to spend no less than 12 hours per month on courses in the program
10.1.3. Distance learning
For EAP purposes, distance learning encompasses the use of technology and other delivery methods to provide off‑site instruction and learning.
Beneficiaries taking distance education courses must meet the following 2 conditions to qualify for an EAP:
- be enrolled in either a qualifying educational program (full‑time) or specified educational program (part‑time)
- be enrolled as a student at a post‑secondary institution (for more information, refer to 10.2. Post‑secondary educational institutions)
For more information about programs, enrolment and study options, contact the CRA Individual income tax enquiries line at 1‑800‑959‑8281.
10.2. Post‑secondary educational institutions
A post‑secondary educational institution for the purposes of an EAP can be one of the following:
- a university, college or other educational institution in Canada designated by a provincial authority under the Canada Student Loans Act
- a university, college or other educational institution in Canada designated by an appropriate authority under the Canada Student Financial Assistance Act
- a university, college or other educational institution in Canada designated by the province of Quebec under an act respecting financial assistance for education expenses
- an educational institution in Canada:
- certified by the Minister of ESDC to be an educational institution providing courses (other than courses designed for university credit) that furnish a person with skills, or
- improve a person’s skills in a specific occupation
- a university, college, or other educational institutions outside Canada that provides courses at a post‑secondary school level
It is the promoter’s responsibility to examine all relevant authorities to verify if an educational institution is recognized for EAP purposes.
10.2.1. Educational institutions recognized for EAP purposes
An educational institution is recognized for EAP purposes if it is designated or certified. Designation is a provincial process whereby students from these educational institutions are eligible to receive Canada Student Loans. Certification is of federal authority and is designed to allow students, 16 years or older, to quality for a tuition tax credit.
10.2.1.1. Certification of post‑secondary educational institutions
The Canada Education Savings Program (CESP) at ESDC certifies post secondary institutions under the Income Tax Act:
- to provide students with certificates to claim education‑related tax credits
To be certified, an educational institution must:
- be legally registered as a business and offer courses or training in Canada
- offer courses, other than courses designated for university credit, that allow a person to gain or improve the skills in a specific occupation, and
- be provincially licensed as a private vocational or trade school (or demonstrate that they are exempt)
Universities and colleges designated by the CESP and educational institutions already registered by a province or territory, except those in Quebec:
- do not need to be certified
These educational institutions are already eligible to issue tax credit certificates and are designated for the purpose of an EAP.
To verify if a particular educational institution in Canada is certified please consult the following web page: List of certified institutions.
Note: Educational institutions, whether public or private:
- do not need to be certified by ESDC if they have already been designated by a province for the purposes of student financial assistance
10.2.1.2. Designated post‑secondary educational institutions
The CESP of ESDC maintains a Master List of designated educational institutions. The Master List of designated educational institutions has over 700 Canadian and International educational institutions.
For more information, consult the list of designated educational institutions on the following web page: List of designated educational institutions.
It is possible that some educational institutions that were formerly recognized for the purposes of the Canada Student Financial Assistance Program may:
- no longer be found on the Master List of designated educational institutions if borrowers have not recently attended these institutions
To confirm whether an educational institution is recognized:
- contact your provincial or territorial student financial aid authority on the following web page: Provincial or territorial student financial aid authority
For information regarding eligible post‑secondary educational institutions in the province of Quebec, please contact Quebec’s Loans and Bursaries Program at 1‑877‑643‑3750. Another option is to consult the following Student Financial Assistance web page: Loans and Bursaries Program.
The CRA individual income tax enquiry line can provide information regarding eligible educational institutions within Canada as well. Please contact one of the following numbers:
- 1‑800‑959‑8281 (English)
- 1‑800‑959‑7383 (French)
10.2.1.3. Educational institutions outside of Canada
Eligible educational institutions outside of Canada do not have to be recognized for EAP purposes.
In order for an EAP to be paid out, the educational institution must:
- provide courses at a post secondary school level, and
- the beneficiary must have been enrolled in a course of not less than 13 consecutive weeks
After 2010, an EAP can be paid to a beneficiary:
- enrolled at a university outside Canada on a full-time basis in a course of not less than 3 consecutive weeks
10.3. Education assistance payment (EAP)
An EAP is a payment from an RESP to help an eligible beneficiary cover expenses associated with post‑secondary education.
An EAP consists of amounts from available notional accounts in the RESP, including the accumulated income and any education savings incentives.
Provincial incentives are payments to an RESP through a designated provincial program. At this time, there are 3 designated provincial programs with the following provincial incentives:
- SAGES
- BCTESG
- Quebec Education Savings Incentive (QESI)
Please note that ESDC does not administer the QESI.
10.3.1. Sharing incentives and accumulated income in the plan
Specific rules govern the sharing of incentives and accumulated income. Depending on the type of incentive and the type of plan, as summarized in the table below.
| Incentive | Family plans: Share incentive? |
Family plans: Share accumulated income? |
Group plans: Share incentive and accumulated income? |
|---|---|---|---|
| Basic CESG | Yes, with cousins or siblings | Yes, with cousins or siblings | No |
| Additional CESG | Yes, with siblings only | Yes, with siblings only | No |
| CLB | No | Yes, with siblings only | No |
| SAGES | Yes, with siblings or cousins | Yes, with siblings or cousins | No |
| BCTESG | Yes, with siblings only | Yes, with siblings only | No |
The Additional CESG, the CLB, the SAGES and the BCTESG amounts can be paid only into individual plans or family plans in which all beneficiaries are siblings.
Note: While SAGES can only be paid into an individual or a sibling‑only plan
- a cousin could be added to the family plan without having to repay the SAGES already paid in the RESP
However, no new amount of SAGES will be paid into the plan from that time on.
For more information, refer to the following relevant chapters:
10.3.2. Income for the beneficiary
The beneficiary must claim the EAP as income. However, depending on the beneficiary’s circumstances, there may not be a requirement to pay any taxes on this amount. The promoter issues a T4A slip for income tax purposes when EAPs are issued.
10.3.3. The promoter’s responsibilities
The promoter’s responsibilities include the following:
- confirm that the beneficiary qualifies for an EAP
- respect the limits associated with EAPs, including verifying with the subscriber if EAPs have been made with other promoters
- calculate the portion of EAP, which is attributable to each available notional account (accumulated income and incentives)
- make and verify the EAP
- when an EAP is made, the promoter must inform the beneficiary, in writing, of:
- each incentive amount included in the EAP
- obligation to repay any portion of an EAP attributable to incentives to which the beneficiary is not entitled, and
- any portion of an EAP attributable to the CESG that exceeds $7,200
- issue a T4A for tax purposes to the beneficiary
10.3.4. Confirm beneficiaries qualify for an EAP
Before making an EAP, the promoter is responsible for confirming that the beneficiary qualifies. To do so, they must obtain proof of enrolment at a post‑secondary educational institution in one of the following programs:
- qualifying educational program, or
- specified educational program
For more information, refer to 10.1.1. Qualifying educational programs – Full‑time studies and 10.1.2. Specified educational programs – Part‑time studies earlier in this chapter.
For more information, refer to 10.5. Processing an EAP request, 6 month grace period later in this chapter.
A promoter is not required to obtain receipts from a beneficiary as proof of expenses before making an EAP. The promoter determines whether the:
- EAP helps further the beneficiary’s education
- it is reasonable
- the payment complies with the requirements of the Income Tax Act (ITA), and
- the terms of the plan
On August 12, 2008, a yearly EAP threshold of $20,000, indexed annually based on the Consumer Price Index was established by the CRA to:
- assist promoters in determining the reasonableness of an EAP request
The CRA has updated RESP Bulletin No. 1R2 with the following annual EAP threshold limits indexed to 2022.
| Year | Limit |
|---|---|
| 2023 | $26,860 |
| 2022 | $25,268 |
| 2021 | $24,676 |
| 2020 | $24,432 |
| 2019 | $23,976 |
| 2018 | $23,460 |
| 2017 | $23,113 |
| 2016 | $22,794 |
| 2015 | $22,501 |
| 2014 | $22,125 |
| 2013 | $21,928 |
| 2012 | $21,498 |
| 2011 | $20,912 |
| 2010 | $20,623 |
| 2009 | $20,500 |
For more information, refer to the following CRA web page: RESP Bulletin No. 1R2.
The Association of Registrars of the Universities and Colleges of Canada (ARUCC) provides access to the approved Verification of Enrolment Form. The form may be used by Canadian universities and colleges to provide their students with the verification of enrolment information needed when requesting an EAP.
The RESP Verification of Enrolment Form was approved for use by:
- ESDC
- CRA
- Canadian Bankers Association (CBA)
- Investment Dealers Association (IDA)
- Investment Funds Institute of Canada (IFIC), and
- Registered Education Savings Plan Dealers Association of Canada (RESPDAC)
The Registered Education Savings Plan Verification of Enrolment Form can be found on the ARUCC web page.
10.4. EAP limits
An EAP must be used to pay actual post‑secondary educational expenses. There are specific limits on the amount of EAPs a beneficiary can receive.
These limits depend on post‑secondary enrolment criteria and on whether the RESP was open before or after 1998. For example, how long the beneficiary has been enrolled.
10.4.1. Full‑time studies – $5,000 EAP limit for first 13 weeks
Plans entered into after 1998
During the first 13 weeks of enrolment in full time studies, the maximum amount of EAPs that can be made to a beneficiary is normally the lesser of:
- $5,000
- the total allowable expenses
For more information, refer to 10.5.1. Special requests for EAPs in excess of the $5,000 or $2,500 limits later in this chapter.
After completing 13 consecutive weeks of full time studies in a qualifying educational program:
- the maximum amount of EAPs that can be made to a beneficiary is the total allowable expenses, provided that the beneficiary continues to be eligible for such payments
For more information, refer to 10.3.4. Confirm beneficiaries qualify for an EAP above.
If there is a 12 month period during which the beneficiary is not enrolled in a qualifying educational program for 13 consecutive weeks:
- the $5,000 limit will once again apply
Note: Contributions withdrawn by the subscriber while a beneficiary qualifies for EAPs are not included in this $5,000 limit.
The total amount of EAPs made to the individual under the RESP (and other RESPs of the same promoter) in the first 13 consecutive weeks of enrolment:
- cannot exceed the limit of $5,000
Therefore, if a beneficiary has multiple RESPs with a single promoter, the $5,000 limit applies across all plans held with that promoter. However, the limit does not apply across plans held by different promoters.
Example, Sandra has been enrolled for the past 2 years as a full‑time student in a post‑secondary education program that qualifies for an EAP:
- in September of her first academic year:
- Sandra could only receive a maximum amount of $5,000 in EAPs because she was not enrolled in the previous 12 months
- in September of her second consecutive academic year:
- the $5,000 limit no longer applies because she was enrolled for at least 13 consecutive weeks in the previous 12 month period
10.4.2. Part‑time studies – $2,500 EAP limit for the 13 weeks preceding payment
For the 13 week period of enrolment in part‑time studies preceding the payment of an EAP, the maximum amount of EAP that can be paid to a beneficiary is the lesser of:
- $2,500
- total of all allowable expenses
For more information, refer to 10.5.1. Special requests for EAPs in excess of the $5,000 or $2,500 limits later in this chapter.
Note: Contributions withdrawn by the subscriber while a beneficiary qualifies for EAPs are not included in this $2,500 limit.
The total amount of EAPs made to the individual under the RESP (and other RESPs of the same promoter) in the preceding 13 week period cannot exceed the limit of $2,500. Therefore, if a beneficiary has multiple RESPs with a single promoter, the $2,500 limit applies across all plans held with that promoter. However, the limit does not apply across plans held by different promoters.
10.4.2.1. Example 1
Jane (17 years old) is an RESP beneficiary in an individual (non‑family) plan. Enrolled in a part‑time post‑secondary program for a total of 26 weeks which involves 16 hours of courses per month. Jane satisfies the required conditions for a specified educational program because:
- Jane is at least 16 years old
- she is studying at a post‑secondary level
- the program is not less than three consecutive weeks
- there are no less than 12 hours of courses per month
The actual educational expense for the program is $6,000. The subscriber would like to request the following EAP payments for Jane on the dates shown.
| Date | September 10 | October 22 | December 17 | February 4 | March 10 |
|---|---|---|---|---|---|
| EAP requested | $1,000 | $200 | $1,300 | $1,200 | $1,300 |
| Approve EAP request? | Yes | Yes | Yes | Yes | No |
Promoters must assess each EAP request individually to determine whether it exceeds the $2,500 limit for part‑time studies:
- September 10: The request for $1,000 on September 10 is approved, because it does not exceed the $2,500 limit (there were no previous EAP requests)
- October 22: The request for $200 on October 22 is approved, because only 2 EAP requests are within a 13 week period and their sum ($1,000 + $200 = $1,200) does not exceed $2,500
- December 17: The request for $1,300 on December 17 is approved, because only 2 EAP requests are within a 13 week period and their sum ($1,300 + $200 = $1,500) does not exceed $2,500
- February 4: The request for $1,200 on February 4 is approved, because only 2 EAP requests are within a 13 week period and their sum ($1,300 + $1,200 = $2,500) does not exceed $2,500
- March 10: The request for $1,300 on March 10 is refused, because there were already 2 EAP payments (total of $2,500) in the past 13 weeks
Beneficiaries can request EAPs greater than $2,500. For more information, refer to 10.5.1. Special requests for EAPs in excess of the $5,000 or $2,500 limits later in this chapter.
10.4.2.2. Example 2
John is an eligible beneficiary enrolled in a 26 week program of part‑time studies costing $5,000. The subscriber requests an EAP payment of $2,000 in week 1 and is paid this amount because it does not exceed $2,500. In week 15 John is eligible for another EAP payment of $2,500. The subscriber would like to request the balance of the tuition which is $3,000. As this would exceed the $2,500 limit for part‑time studies. The subscriber could request an EAP amount of $2,500 and if there are contributions in the RESP, ask for the remaining $500 in a PSE contribution withdrawal. An alternative would be to make a request to the Minister to receive an EAP for the full amount of $3,000. For more information, refer to 10.5.1. Special requests for EAPs in excess of the $5,000 or $2,500 limits later in this chapter.
10.4.3. EAP limits for RESPs opened before 1998
Different EAP rules may apply to RESPs opened before 1998, which were not amended to comply with the ITA amendments on January 1, 1999.
These RESPs existed before the CESG was introduced and are considered to be “grandfathered”. Rules applying to “grandfathered” RESPs entered into before 1998 may include the following:
- some plans may permit EAPs for part‑time studies, without any restrictions
- for some plans, there is no limit on the amount of the EAP during the first 13 weeks of a qualifying post‑secondary educational program
For more information, contact the CRA Registered Plans Directorate at 1‑800‑267‑3100.
10.5. Processing an EAP request
The promoter is responsible for verifying each EAP request to ensure that the beneficiary is eligible for the EAP. The process for obtaining and approving each EAP request is as follows:
- the beneficiary must be enrolled as a student in a qualifying program at a designated post‑secondary educational institution
- the subscriber contacts the promoter and requests the EAP
- the promoter verifies whether the beneficiary is enrolled as a student in a qualifying program in a designated post‑secondary educational institution recognized by the CRA
For more information, refer to 10.1. Defining post‑secondary education and 10.2. Post‑secondary educational institutions earlier in this chapter.
- verifies whether the amount requested covers valid educational expenses which will help the beneficiary further their education
The promoter’s organization may have established guidelines or policies with respect to acceptable educational expenditures.
- verifies how long the beneficiary was enrolled as a student to determine if any limits will be applied to the EAP request. Verifies with the subscriber whether EAPs have been withdrawn from other promoters. For more information, refer to 10.4. EAP limits earlier in this chapter
If there is a 12 month period when the beneficiary was not enrolled in a qualifying educational program, the $5,000 limit will apply once again.
- calculates the EAP
When an EAP is requested, there are specific rules that determine how the EAP is calculated. These rules are necessary to track payments from the RESP, in case repayment of all or a portion of the incentive account is required. For more information, refer to section 10.6. Calculating the EAP, below.
- informs the beneficiary, in writing, of:
- each incentive amount included in the EAP, and
- their obligation to repay any amounts for which they are not entitled, including:
- any CESG amount exceeding the $7,200, and
- any portion of an EAP attributable to Incentives to which the beneficiary is not entitled
- the subscriber may request a post‑secondary education (PSE) contribution withdrawal without any penalty if desired
The subscriber can keep their contributions or give them to the beneficiary.
There is a 6 month grace period for requesting an EAP, which allows for more flexibility for a beneficiary to access RESP savings. A beneficiary is eligible to receive an EAP for up to 6 months after ceasing to be enrolled in a qualifying program, provided that the beneficiary would have qualified while still enrolled.
10.5.1. Special requests for EAPs in excess of the $5,000 or $2,500 limits
Note: Contributions are not included as part of an EAP.
The Minister of ESDC may approve the payment of an EAP over the limit of $5,000 or $2,500, in response to a written request if:
- the promoter concludes that an EAP of over $5,000 during the first 13 weeks of studies is required, or
- the promoter concludes that an EAP of over $2,500 is required for a specific 13 week period
The promoter must follow this procedure:
- obtain a request for an Educational Assistance Payment (EAP) for:
- over $5,000 for full‑time studies or over $2,500 for part‑time studies from a Registered Education Savings Plan (RESP) form
- request the beneficiary to complete and sign it
How to obtain the form, the above form and related guidelines can be forwarded to the promoters upon request. Requests can be made by:
- telephone: 1‑888‑276‑3624
- email: cesp–pcee@hrsdc–rhdcc.gc.ca
- sign the form as a representative of the promoter
- mail the completed form to:
Canada Education Savings Program, ESDC
Phase IV, Bag 4
140 Promenade du Portage
Gatineau QC K1A 0J9
Note: For the protection of personal information, this information should not be submitted by email and will not be responded to.
The CESP will assess each request on a case‑by‑case basis, and notify the promoter of the decision once it has been made.
10.6. Calculating the EAP
An EAP includes a portion of each of the following RESP notional accounts if they are available to the beneficiary receiving the EAP:
- accumulated income
- the CESG
- the CLB
- provincial incentives (accounts maintained for each designated provincial program)
Provincial incentives, a promoter must be able to track transactions associated with each of the designated provincial programs that the promoter delivers to the public.
For example:
- promoters delivering the SAGES will have RESP notional accounts to track all activities associated with the SAGES
- promoters delivering the BCTESG will have RESP notional accounts to track all activities associated with the BCTESG
- promoters delivering the QESI will have RESP notional accounts to track all activities associated with the QESI
RESP contributions are the subscriber’s property. Contributions withdrawn when a beneficiary is eligible for an EAP (post‑secondary education contribution withdrawals) are not included in EAP amounts.
National accounts of a RESP:
- used for educational assistance payments:
- accumulated income
- CESG (Basic and Additional)
- CLB (per beneficiary)
- provincial incentives (per designated provincial program)
- subscriber’s property:
- assisted contributions
- unassisted contributions
10.6.1. The EAP calculation process
The EAP formulas determine how much to withdraw from each notional account of an RESP when a subscriber requests an EAP. These formulas result in the same proportion being taken from each RESP notional account available to the beneficiary receiving an EAP.
The promoter takes the following steps to calculate an EAP:
- determine amounts available to the beneficiary
- calculate the portions of an EAP from each notional account available by using the different EAP formulas
The EAP formulas used in this module are the ones that came into force on September 1, 2019.
For more information about the EAP formulas, refer to the Canada Education Savings Regulations.
RESP notional accounts are the book value of a RESP, which may not reflect the actual value of the asset in the plan.
Previous EAP formulas – Before September 1, 2019.
If an EAP with a transaction date prior to September 1, 2019:
- is reversed on or after that date, and a recalculation is necessary for this EAP;
- the promoter is required to use the previous formulas to recalculate this EAP
The promoter uses the previous formulas to calculate EAP portions attributable to each incentive amount available in a RESP. Note that these formulas differ if there has been a loss in the plan (no accumulated income).
| Incentive | RESP with earnings | RESP with no earnings |
|---|---|---|
| CESG | (A × F) / (C – D – E) | (A × F) / (B + F + G) |
| CLB | (A × B) / (C – D – E) | (A × B) / (B + F + G) |
| SAGES | (A × J) / (C – D – E) | (A × J) / (B + F + G) |
| BCTESG | (A × K) / (C – D – E) | (A × K) / (B + F + G) |
| Other provincial incentives | (A × Y) / (C – D – E) | (A × Y) / (B + F + G) |
Where:
- A is the amount of the EAP
- B is the balance in the beneficiary’s CLB account of the RESP immediately before the EAP is made
- C is the fair market value (FMV) of the property held in connection with the RESP, determined immediately before the EAP is made
- D is the total of all contributions made to the RESP before the EAP is made that have not been withdrawn
- E is the total of all CLB accounts of the other beneficiaries under the RESP immediately before the EAP is made
- F is the balance in the CESG account of the RESP immediately before the EAP is made
- G is the total of all amounts paid into the RESP under a designated provincial program. In other words, it is the total of all provincial incentive account balances in the RESP immediately before the EAP is made
- J is the balance in the SAGES account of the RESP immediately before the EAP is made
- K is the balance in the BCTESG account of the RESP immediately before the EAP is made
- Y is the balance in another provincial incentive account of the RESP immediately before the EAP is made
10.6.1.1. Determine the total amount available to the beneficiary for an EAP
As there is only one beneficiary in an individual plan, accumulated income and all incentive amounts in the plan are available for an EAP. However, in certain situations, some education savings incentives cannot be paid in an EAP.
In a family plan
The following amounts could be available for a single beneficiary receiving an EAP from the plan even if the amounts were first paid in the name of another beneficiary (except the CLB):
- the accumulated income
- all CESG amounts (includes Basic and Additional CESG) if the beneficiary received less than $7,200 in previous EAPs
- all SAGES amounts
- all BCTESG amounts
- only the CLB account balance for the beneficiary receiving the EAP
Sharing of other provincial incentives in a family plan, the sharing of a provincial incentive may or may not apply to other designated provincial programs. Consult the provincial authority.
Residency requirements for an EAP, the CRA determines residency status for tax purposes. Beneficiaries can study outside of Canada and still be considered by the CRA as residents of Canada. For more information, contact the CRA at 1‑800‑959‑8281 (English) or 1‑800‑959‑7383 (French).
Promoters must consider a beneficiary’s residency status to determine whether or not an RESP notional account is available for an EAP.
- Accumulated income: If a beneficiary is enrolled in a qualifying program, accumulated income may be included in an EAP even if the beneficiary is not a resident of Canada when the EAP is made. Consult the CRA for more information
- CESG: To receive the CESG in an EAP, the beneficiary must be a resident of Canada when the EAP is made
- CLB: To receive the CLB in an EAP, the beneficiary must be a resident of Canada when the EAP is made
- SAGES: To receive the SAGES in an EAP, the beneficiary must be a resident of Canada when the EAP is made
- BCTESG: If a beneficiary is enrolled in a qualifying program. The BCTESG may be included in an EAP payment, even if the beneficiary is not a resident of Canada when the EAP is made
- Other provincial incentives: Consult the provincial authority for EAP residency criteria
10.6.1.2. Calculate the portion of an EAP to withdraw from each available notional account
As of September 1, 2019, the promoter must use the following formulas to:
- calculate EAP portions attributable to each notional account of incentives and the accumulated income available for a beneficiary in an RESP
| Incentive | Formula |
|---|---|
| CLB | A × B / C |
| CESG | The CESG formula is equal to the lesser of (A) and (B) where: (A) The result of the CESG formula A × D / C (B) $7,200 – total amount of the CESG already received in previous EAP for the same beneficiary |
| Accumulated income | A × E / C |
| BCTESG | A × F / C |
| SAGES | A × G / C |
Where:
- A is the amount of the EAP
- B is the balance of the beneficiary’s CLB account immediately before the payment of the EAP
- C is the total amount available to the beneficiary for an EAP
- D is the balance in the CESG account immediately before the payment of the EAP
- E is the amount of the accumulated income in the RESP immediately before the payment of the EAP
- F is the balance in the BCTESG account immediately before the payment of the EAP
- G is the balance in the SAGES account immediately before the payment of the EAP
Formulas for other provincial incentives, for formulas for provincial incentives not administered by ESDC, please refer to the province in question for additional information.
10.6.2. Example: Family plan with no prior EAP
The following example is used to demonstrate how to calculate EAP payments. A beneficiary part of a family plan is not a resident of Canada at the time of the first EAP request of $4,355.
Accumulated income: $3,245.
BCTESG: $2,400.
Beneficiary’s CLB: $1,400.
CESG: $5,300.
Fair market value: $13,420.
10.6.2.1. Determine the total amount available to the beneficiary for an EAP (C)
There are 2 amounts in the EAP formulas that never change in the same series of calculation. These 2 amounts are A and C.
A is the amount of the EAP requested ($4,355).
C is the total amount available to the beneficiary for an EAP.
In this example, C is equal to the sum of the amount of the following notional accounts:
- the accumulated income ($3,245)
- the BCTESG ($2,400)
Therefore, C is equal to $5,645.
Since the beneficiary is not a resident of Canada at the time of the EAP is made:
- the other notional accounts are not available to the beneficiary for an EAP
When using the formulas for this example, A will always be $4,355 and C will always be $5,645.
10.6.2.2. Calculate the portion of the EAP attributable to the accumulated income
A and C have been determined, the incentives and the accumulated income portions can be calculated, beginning with the accumulated income.
The accumulated income calculation formula is A × E / C.
Where E is the amount of accumulated income in the account immediately before the payment of the EAP.
Therefore: A ($4,355) × E ($3,245) / C ($5,645).
The formula result is $2,503.45, which is the portion of the EAP that will be withdrawn from the accumulated income notional account.
10.6.2.3. Calculate the portion of the EAP attributable to the BCTESG
The BCTESG calculation formula is A × F / C.
Where F is the balance in the BCTESG account immediately before the payment of the EAP.
Therefore: A ($4,355) × F ($2,400) / C ($5,645).
The formula result is 1,851.55, which is the portion of the EAP that will be withdrawn from the BCTESG notional account.
10.6.2.4. EAP total
In this scenario, when adding together the portions of the accumulated income ($2,503.45) and the BCTESG ($1,851.55), the result equals $4,355. This is equivalent to the amount of EAP requested.
10.6.3. Example: Family plan with more than one EAP requested
A subscriber requests an EAP of $985 (A) for a beneficiary who is a resident of Canada and is part of a family plan. The subscriber informs the promoter that the beneficiary already received a total of $6,800 in CESG from prior EAPs.
Accumulated income: $1,320.
BCTESG: $600.
Beneficiary’s CLB: $350.
CESG: $5,800.
Fair market value: $8,070.
10.6.3.1. Determine the total amount available to the beneficiary for an EAP (C)
C equals the total amount of the combined notional accounts available to the beneficiary for an EAP.
In this example, C is equal to the sum of the amounts of the following notional accounts:
- the accumulated income ($1,320)
- the BCTESG ($600)
- the beneficiary’s CLB ($350)
- the CESG ($5,800)
Therefore, C equals $8,070.
10.6.3.2. Calculate the portion of the EAP attributable to the CLB
A and C have been determined, A ($985) and C ($8,070). The next step is to calculate the portion attributable to each incentive and the accumulated income.
The CLB calculation formula is A × B / C.
Where B is the balance in the beneficiary’s CLB account immediately before the payment of the EAP.
Therefore: A ($985) × B ($350) / C ($8,070).
The formula result is $47.72, which is the portion of the EAP that will be withdrawn from the beneficiary’s CLB notional account.
10.6.3.3. Calculate the portion of the EAP attributable to the CESG
The CESG calculation is equal to the lesser of (A) and (B) where:
- A is the CESG EAP formula result, and
- B is the difference between the $7,200 CESG EAP limit and the CESG amount already received in previous EAP
(A) The CESG EAP formula is A × D / C.
Where D is the balance in the CESG account immediately before the payment of the EAP.
Therefore: A ($985) × D ($5,800) / C ($8,070).
The formula result of “A” is $707.93.
(B) $7,200 less the total amount of CESG already received in previous EAPs for the same beneficiary.
Therefore: $7,200 – $6,800 = $400.
The result of “B” is $400.
In this case, the lesser of the two is the result of “B” ($400). This is therefore the portion of the EAP that will be withdrawn from the CESG notional account.
10.6.3.4. Calculate the portion of the EAP attributable to the accumulated income
The accumulated income formula is A × E / C.
Where E is the amount of the accumulated income account immediately before the payment of the EAP.
Therefore: A ($985) × E ($1,320) / C ($8,070).
The formula result is $161.12, which is the portion of the EAP that will be withdrawn from the accumulated income notional account.
10.6.3.5. Calculate the portion of the EAP attributable to the BCTESG
The BCTESG formula is A × F / C.
Where F is the balance in the BCTESG account immediately before the payment of the EAP.
Therefore: A ($985) × F ($600) / C ($8,070).
The formula result is $73.23, which is the portion of the EAP that will be withdrawn from the BCTESG notional account.
10.6.3.6. Partial EAP total
In this scenario, when adding together the portions of the EAP attributable to:
- the CLB ($42.72), the CESG ($400), the accumulated income ($161.12) and the BCTESG ($73.23)
The result equals $677.07. However, the subscriber requested $985.
To fill the gap between the EAP amount requested ($985) and the EAP partial result ($677.07):
- the promoter will need to calculate the difference between the 2 amounts ($985 – $677.07)
The promoter must use this result as variable A in a second series of calculation to collect a second portion of each remaining notional accounts available for EAP. The new variable A is $307.93.
The promoter should also subtract the portions already withdrawn from each notional account during the first series of calculation before beginning the second series of calculation.
Accumulated income: $1,320 – $161.12 = $1,158.88.
BCTESG: $600 – $73.23 = $526.77.
Beneficiary’s CLB: $350 – $42.72 = $307.28.
CESG: $5,800 – $400 = $5,400.
Fair market value: $8,070 – $677.07 = $7,392.93.
10.6.3.7. Calculate the new total amount available to the beneficiary for an EAP (C)
C for the second series of calculation is equal to the sum of the following updated notional accounts:
- the accumulated income ($1,158.88)
- the BCTESG ($526.77)
- the beneficiary’s CLB ($307.28), and
- the CESG if the beneficiary received less than $7,200 in previous EAPs ($0)
In the first round of calculations, the beneficiary reached the $7,200 limit in CESG. For that reason, the CESG amount available for the second round of calculation will be $0.
Therefore, the new amount of C will be $1,992.93.
10.6.3.8. Calculate the portion of the EAP attributable to the CLB
The new values A and C have been determined, A ($307.93) and the new value of C ($1,992.93). The next step is to calculate the portions attributable to each incentive and accumulated income available for an EAP.
The CLB calculation formula is A × B / C.
Where B is the balance in the beneficiary’s CLB account immediately before the payment of the EAP.
Therefore, the amounts for each are: A ($307.93) × B ($307.28) / C ($1,992.93).
The formula result is $47.48, which is the second portion of the EAP that will be withdrawn from the beneficiary’s CLB notional account.
10.6.3.9. Calculate the portion of the EAP attributable to the accumulated income
The accumulated income calculation formula is A × E / C.
Where E is the amount in the accumulated income account immediately before the payment of the EAP.
Therefore, the amounts for each are: A ($307.93) × E ($1,158.88) / C ($1,992.93).
The formula result is $179.06, which is the second portion of the EAP that will be withdrawn from the accumulated income notional account.
10.6.3.10. Calculate the portion of the EAP attributable to the BCTESG
The BCTESG calculation formula is A × F / C.
Where F is the balance in the BCTESG account immediately before the payment of the EAP.
Therefore, the amounts for each are: A ($307.93) × F ($526.77) / C ($1,992.93).
The formula result is $81.39, which is the second portion of the EAP that will be withdrawn from the BCTESG notional account.
10.6.3.11. Second partial EAP total
Table 7: Second partial EAP total
| EAP calculation | Accumulated income | BCTESG | Beneficiary’s CLB | CESG |
|---|---|---|---|---|
| 1st series of the calculation | $161.12 | $73.23 | $42.72 | $400 |
| 2nd series of the calculation | $179.06 | $81.39 | $47.48 | $0 |
| Total | $340.18 | $154.62 | $90.20 | $400 |
The second partial EAP total is equal to the sum of the second portions attributable of the beneficiary’s:
- CLB ($47.48), the accumulated income ($179.06), the BCTESG ($81.29) totalling $307.93
10.6.3.12. Final EAP total
The final EAP total is equal to the sum of the first and the second series of partial EAP total.
The result should equal the EAP amount requested.
When adding the amounts from the first set of calculations ($677.07) to the second set of calculation ($307.93), the result is $985. This is equivalent to the initial EAP amount requested.
10.6.4. Example: Individual plan with losses
A beneficiary is named in one individual RESP and is a resident of Canada at the time the EAP is made. The subscriber requests an EAP of $1,600. The RESP only contains the BCTESG and the CLB since a contribution withdrawal caused a repayment of the CESG.
Accumulated income: $0.
BCTESG: $880.
Beneficiary’s CLB: $450.
CESG: $0.
Fair market value: $970.
In this scenario, the total book value of the combined notional accounts of the BCTESG ($880) and the CLB ($450) is equal to $1,330.
However, the current fair market value of the plan is $970. Which means there are investment losses in the plan, as the fair market value is less than the book value.
All losses are first attributed to accumulated income, followed by contributions. When losses have depleted, the accumulated income and contribution notional accounts to nil, any remaining losses are considered to be attributed proportionally to the incentives.
It is important to understand that losses from investment products are not actually deducted from the RESP notional accounts when EAP calculations are made. Notional account values are updated only when these amounts are withdrawn or repaid. For this reason, when calculating an EAP with losses in the plan, promoters must:
- use the balance of the incentive amount received to date less any amount withdrawn or repaid, rather than using the residual amount with losses included
In addition, an EAP cannot be paid if the EAP amount is greater than the fair market value of the plan.
In this example, the subscriber cannot request an EAP amount greater than $970, which is the current fair market value of the plan.
10.6.4.1. Identify the total amount available to the beneficiary for an EAP (C)
The first step of the calculations is to determine the EAP amount available to the beneficiary (C).
In this example, C is equal to the sum of the amounts in the notional accounts of the BCTESG and of the beneficiary’s CLB.
Therefore, C equals $1,330.
10.6.4.2. Calculate the portion of the EAP attributable to the CLB
A and C have been determined, the values of A ($970) and variable C ($1,330). The next step is to calculate the portion attributable of each incentive.
The CLB calculation formula is A × B / C.
Therefore, the amounts for each are: A ($970) × B ($450) / C ($1,330).
Where B is the balance in the beneficiary’s CLB account immediately before the payment of the EAP.
The formula result is $328.20, which is the portion of the EAP that will be withdrawn from the beneficiary’s CLB notional account.
10.6.4.3. Calculate the portion of the EAP attributable to the BCTESG
The BCTESG calculation formula is A × F / C.
Where F is the balance in the BCTESG account immediately before the payment of the EAP.
Therefore, the amounts for each are: A ($970) × F ($880) / C ($1,330).
The formula result is $641.80, which is the proportion of the EAP that will be withdrawn from the BCTESG notional account.
10.6.4.3. EAP total
When adding together the portions of the EAP attributable to the CLB ($328.20) and the BCTESG ($642.80), the sum is equal to $970. This is equivalent to the amount of EAP requested.
The fair market value of the plan is now at $0.
10.7. EAP values reported to the CESP system
When promoters process an EAP for a beneficiary, they must report the corresponding information electronically to the CESP system (transaction 400‑13).
Requirements for these EAP transactions are specified in the CESP Interface Transaction Standards. This document can be downloaded from the Systems documentation tab of the Canada.ca/RESPresources web page.
Following amounts, if applicable, are included with various information that must be submitted in EAP transactions:
- EAP Amount (the total amount of the EAP, including accumulated income, the CESG, the CLB, the SAGES and the BCTESG)
- EAP CESG amount
- EAP CLB amount
- EAP SAGES amount
- EAP BCTESG amount
ESDC does not administer the QESI. Therefore, promoters are not required to report specific QESI amounts in EAP transactions submitted to the CESP system. However, if there are QESI amounts in an EAP, they must be included in the total EAP amount reported to the CESP system.
Reporting other QESI data to the CESP system:
- promoters must include all assets in RESPs when reporting the FMV of an RESP in their monthly summary reports (record type 700)
As such, the FMV amount should include saving incentives from all sources present in the RESP, including the QESI if applicable.
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