Chapter 7. Registered Education Savings Plan provider user guide – British Columbia Training and Education Savings Grant

On this page

• List of acronyms
• Introduction
• 7.1. BCTESG – An overview
• 7.2. Eligibility criteria
• 7.3. BCTESG amounts
• 7.4. Applying for the BCTESG
• 7.5. Receiving and depositing the BCTESG
• 7.6. Repaying the BCTESG
• 7.7. Other transactions involving the BCTESG

Alternate format

A PDF version of the Registered Education Savings Plan provider user guide is available on the index page.

Introduction

The Government of British Columbia announced the British Columbia Training and Education Savings Grant (BCTESG) in 2013.

Employment and Social Development Canada (ESDC) has partnered with the Government of British Columbia to administer this provincial education savings incentive.

Registered Education Savings Plan (RESP) promoters must be authorized by ESDC to offer the BCTESG or any other education savings incentive administered by ESDC.

For more information, refer to Appendix C for a list of acronyms and terms used in this guide.

7.1. BCTESG – An overview

BCTESG is an education savings incentive that is paid:

• by the Government of British Columbia
• from a designated provincial program administered by ESDC
• into an RESP
• for children born on or after January 1, 2006, and
• for children who are residents in British Columbia at the time of the BCTESG application. The custodial parent or a legal guardian must also be a resident

BCTESG is a $1,200 one time grant per eligible beneficiary. When an eligible child turns 6 years old, the subscriber may be able to apply for the grant.

7.1.1. How it works

BCTESG payment is based on the following requirements:

• an RESP: a subscriber must meet with a participating promoter, open an RESP and name an eligible beneficiary(ies). For more information, refer to Chapter 4. Registered Education Savings Plans. To be eligible to receive the BCTESG, the RESP must be:
  • an individual (non family) plan, or
  • a family plan in which all beneficiaries are siblings

  Note: A contribution to the RESP is not required to receive the BCTESG

• eligibility criteria: the subscriber and participating promoter review the BCTESG eligibility criteria. For more information, refer to 7.2. Eligibility criteria
• application process: the subscriber asks the promoter to apply for BCTESG for the beneficiary. For more information, refer to 7.4. Applying for the BCTESG
• educational assistance payments (EAPs): when the beneficiary is enrolled in a post‑secondary education program, the subscriber can request an EAP. The EAP would consist of a payment from the earnings and education savings incentives (including BCTESG) in the RESP. For more information, refer to Chapter 10. Post‑secondary education and educational assistance payments

7.2. Eligibility criteria

Consider the following criteria to determine if a beneficiary is eligible for BCTESG payment:

• does the promoter offer BCTESG?
• has the subscriber established an RESP and named the beneficiary?
• does the beneficiary have a valid Social Insurance Number (SIN)?
• is the RESP either an individual RESP or a family RESP in which each beneficiary is a sibling of every other?^{Footnote 1}
• were the custodial parent or the legal guardian and the beneficiary ordinarily resident in British Columbia when they applied for the BCTESG?
• was the beneficiary born on or after January 1, 2006?
• did the subscriber request the BCTESG (via the RESP promoter) on or after August 15, 2015?

7.2.1. Age limits and application for the BCTESG

Subscribers have a 3 year window to apply for the BCTESG.

Key concept

For children born in 2010 or later, a subscriber must complete the BCTESG application:

• on or after their 6th birthday, but before their 9th birthday

The table below illustrates a transition period for children born in 2006, 2007, 2008 and 2009. This was done to ensure that they have the full 3 years to apply for the BCTESG. The subscriber must complete a BCTESG application within the appropriate 3 year period.

7.2.1.1. Example 1

A beneficiary born on March 20, 2008 is eligible for the BCTESG from March 20, 2014, at age 6. The first day to apply for the BCTESG is August 15, 2015 (beneficiary is 7 years old). The last day to apply is August 14, 2018 (beneficiary is 10 years old).

7.2.1.2. Example 2

A beneficiary born on April 12, 2009 is eligible for the BCTESG from April 12, 2015, at age 6. The first day to apply for the BCTESG is August 15, 2015 (beneficiary is 6 years old). The last day to apply is August 14, 2018 (beneficiary is 9 years old).

7.2.1.3. Example 3

A beneficiary born on October 31, 2009 is eligible for the BCTESG from October 31, 2015, at age 6. The first day to apply for the BCTESG is October 31, 2015 (the beneficiary’s 6th birthday). The last day to apply is October 30, 2018 (the day before the beneficiary’s 9th birthday).

7.2.1.4. Example 4

A beneficiary born on December 5, 2012 is eligible for the BCTESG from December 5, 2018, at age 6. The first day to apply for the BCTESG is December 5, 2018 (the beneficiary’s 6th birthday). The last day to apply is December 4, 2021 (day before the beneficiary’s 9th birthday).

7.2.2. BCTESG and residency requirements

The custodial parent or the legal guardian and the beneficiary must be ordinarily resident in British Columbia at the time of the application to be eligible for the BCTESG.

The custodial parent or the legal guardian must show proof of residency to the RESP promoter at the time of application. They must present at least one of the following documents:

• a valid British Columbia driver’s licence
• a British Columbia identification card with a picture
• a British Columbia Services Card
• a British Columbia utility bill (dated within the last 3 months and listing the current address of the custodial parent or the legal guardian). A utility bill can be any one of the following:
  • electricity
  • gas
  • phone
  • cable
  • water, or
  • garbage bills

For more information on how to complete the required application form, refer to the Appendix A. Application forms – Education Savings Incentives on the Resources for RESP promoters web page.

7.3. BCTESG amounts

Key concept: The BCTESG amount is $1,200 per beneficiary.

7.3.1. BCTESG amounts in EAPs

Each beneficiary can attract only one $1,200 BCTESG payment to one RESP. Once an RESP has received this payment in respect of a particular beneficiary, no other RESP can receive it for the same beneficiary. For more information, refer to 7.5.1. Multiple RESPs – Multiple requests for the same BCTESG beneficiary.

Every beneficiary named in a family RESP has access to the full BCTESG amount in the plan. This applies even if some BCTESG amounts paid (or transferred) into the plan were originally paid in respect of other siblings. Consequently, beneficiaries may receive more than $1,200 of accumulated BCTESG amounts in their EAPs throughout their post secondary studies. For more information, refer to 7.5.2. Sharing the BCTESG and earnings.

7.3.1.1. Example – Sharing BCTESG in EAPs

Laura is a beneficiary in the following RESPs:

• family RESP with promoter A (siblings only)
• individual RESP with promoter B

Laura is not limited to the amount of BCTESG she can receive in EAPs throughout her post secondary studies. She can even use BCTESG amounts paid previously into the family RESP in respect of her siblings.

7.4. Applying for the BCTESG

7.4.1. The application process

The promoter facilitates the BCTESG applications by:

• establishing and requesting registration of the education savings plans (ESPs) initiated by subscribers
• helping subscribers identify incentives for which beneficiaries qualify by providing and explaining eligibility criteria, and
• assisting subscribers in completing the BCTESG application form

The following steps are required to receive a BCTESG payment in an RESP:

1. the subscriber approaches a promoter authorized to offer the BCTESG to open and register an ESP and name a beneficiary
2. the promoter obtains the Social Insurance Numbers (SINs) for the subscriber and the beneficiary and establishes the ESP

   Opening and registering the ESP, the promoter must notify the custodial parent or the legal guardian that an ESP is open for the beneficiary. This has to be done within 90 days of establishing the plan, ESDC is responsible for communicating requests to register ESPs to the Canada Revenue Agency (CRA). CRA notifies promoters directly once the registration of the plan is complete. For more information, refer to Chapter 4. Registered Education Savings Plans

3. the promoter reviews eligibility criteria with the subscriber to identify whether the beneficiary may be eligible for the BCTESG. For more information, refer to 7.2. Eligibility criteria
4. the promoter completes the BCTESG application form with the subscriber and obtains the necessary information and signatures

   Accurate information prevents delays in the BCTESG payment, when completing the BCTESG application form, it is important to verify the accuracy of the information. Promoters use the information on the application form to electronically submit BCTESG requests to the Canada Education Savings Program (CESP) system. Inaccurate information will result in the transaction being returned and will delay the BCTESG payment. For more information, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards

5. the promoter ensures that the subscriber submits the application for the BCTESG within the specified time period. For more information, refer to 7.2.1. Age limits and application for the BCTESG and 7.5.4. Time constraints
6. the promoter processes the application form according to established procedures

   What happens to information collected on the application form? The promoter will enter the information in their information system. They will then transmit electronically the information to the CESP system to request the registration of the ESP and to request the BCTESG payment. For more information, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards

Promoters can also use the optional 7.4.2. Post application checklist to provide subscribers with helpful reminders.

7.4.2. Post application checklist

• Confirm that all information on the BCTESG application form is accurate

  Accurate information ensures the timely payment of BCTESG. Inaccurate information may delay payment

• Remind subscribers that the CESP system may receive multiple BCTESG requests in respect of the beneficiary. This is because one beneficiary can have multiple RESPs

  The CESP system could receive 2 (or more) BCTESG requests for the same beneficiary. In that case, the CESP will pay the BCTESG to the first request submitted and successfully processed by the CESP system

  For more information, refer to 7.5.1. Multiple RESPs – multiple requests for the same BCTESG beneficiary

• If a subscriber is not the beneficiary’s custodial parent or legal guardian, advise the subscriber that the promoter must notify the custodial parent or the legal guardian within 90 days that an ESP has been established
• Advise subscribers that the promoter will notify them once the CRA confirms the registration of the ESP
• Advise subscribers that the promoter will notify them when they receive a BCTESG payment

7.4.3. Requesting BCTESG payment

To request a BCTESG payment, promoters must submit a BCTESG request record “411-40”.

For more information, refer to the CESP Interface Transaction Standards on the Systems Documentation tab of the Resources for RESP promoters web page.

7.5. Receiving and depositing the BCTESG

The CESP system sends a record “911” in the monthly Transaction Processing Report sent to each promoter. This will acknowledge the successful processing of each BCTESG request. This report indicates:

• the BCTESG amount paid on successful requests, and
• refusal reasons if the BCTESG amount is not paid

For more information, refer to 7.5.3. Reasons for non payment of the BCTESG.

Once the CESP system sends the BCTESG payment to promoters, they must:

1. deposit each BCTESG payment into the appropriate RESP account in respect of the beneficiary
2. track and manage all RESP transactions using various RESP accounts
3. update the BCTESG account for each BCTESG payment made to an RESP, and
4. notify the subscriber (via account statements) about all BCTESG amounts deposited into the RESP

7.5.1. Multiple RESPs – Multiple requests for the same BCTESG beneficiary

Since a child can be a beneficiary of more than one RESP, the CESP system responds to BCTESG requests on a first come, first served basis.

7.5.1.1. Example – Multiple requests for the same beneficiary

Laura is a beneficiary in 2 Individual RESPs. One RESP is with promoter A and the other is with promoter B. There were no payment of BCTESG for Laura in any RESP before the following transactions were submitted for processing in September 2015:

• promoter A, BCTESG request: made on August 15, 2015
• promoter B, BCTESG request: made on August 25, 2015

Both BCTESG requests were processed for the same beneficiary in the same processing month. Therefore, the CESP system will process the BCTESG request with the earliest transaction date first. In this example, the BCTESG request from promoter A will be processed before the BCTESG request from promoter B.

Promoter A would receive the $1,200 BCTESG payment.

In this example, the BCTESG amount ($1,200) was not paid to promoter B. Promoter B will receive a refusal reason E Lifetime Limit exceeded for this BCTESG request in their Transaction Processing Report.

7.5.2. Sharing the BCTESG and earnings

The maximum amount of BCTESG that is payable for a beneficiary is $1,200. However, there is no limit to the amount of BCTESG that a beneficiary can use.

All beneficiaries named in an RESP can share the BCTESG and the associated earnings in EAPs if they satisfy EAP eligibility criteria. For more information, refer to 7.3.1. BCTESG amounts in EAPs.

7.5.2.1. Family RESPs

All BCTESG payments to a family RESP are pooled together in one BCTESG account. If a beneficiary named in a family RESP (siblings only) is eligible to receive an EAP, this BCTESG account is available to that beneficiary. Furthermore, any earnings generated by BCTESG can also be shared in an EAP for any eligible beneficiary named in the RESP.

7.5.3. Reasons for non payment of the BCTESG

To ensure the timely payment of BCTESG into RESPs in respect of eligible beneficiaries, the promoter must:

• help subscribers to accurately complete the BCTESG application form, and
• submit information collected on the form, along with other required data, to the CESP system via electronic transactions. These transactions must pass all formatting and business rule validations according to the CESP Interface Transaction Standards

For more information about the types of transactions and reports exchanged between promoters and the CESP system, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards.

7.5.3.1. When transactions are rejected

The CESP system rejects promoter transactions that contain errors and generates corresponding error codes in a monthly Transaction Error Report (record type “800”). The CESP system sends these reports electronically to each promoter’s head office. Promoters are responsible for correcting any errors and resubmitting corrected transactions to the CESP system.

Transaction Error Reports identify BCTESG requests that were rejected due to either missing information or a failure to pass formatting and business rules.

For more information, refer to Appendix E. Understanding error codes.

7.5.3.2. When payments are refused

The CESP system sends a monthly Transaction Processing Report to each promoter’s head office. This report acknowledges receipt of all processed transactions, including processed BCTESG requests (record type “911”). This report would indicate the amounts paid for all successful BCTESG requests. It would also identify any BCTESG requests for which the $1,200 BCTESG payment was refused.

The CESP system refuses BCTESG requests if they do not comply with business rules. For example, a beneficiary receives the $1,200 BCTESG in their RESP. From now on, any additional BCTESG requests for the beneficiary would be processed, but the corresponding BCTESG payment would be refused. For more information, refer to 7.3. BCTESG amounts.

For more information, refer to Appendix F. Understanding refusal reasons.

7.5.4. Time constraints

Due to time constraints, the CESP system may refuse to pay the BCTESG. The promoter would receive one of the following refusal reasons:

• refusal reason 3 (Age of Beneficiary)
• refusal reason D (late transaction)

The CESP system uses the BCTESG request “411-40” transaction date to generate these refusal reasons. Promoters must use the date on which the subscriber requested BCTESG to determine the transaction date of a BCTESG request:

• the subscriber must request the BCTESG for eligible beneficiaries within the required timeframe as described in 7.2.1. Age limits and application for the BCTESG, and
• the transaction date must not be older than 3 years when compared to the date in the header record 001. The header record 101 is the date sent to the CESP system

For more information, refer to the CESP Interface Transaction Standards on the Systems Documentation tab of the Resources for RESP promoters web page.

7.5.4.1. Refusal reason 3 (age of beneficiary)

Promoters must request the BCTESG “411-40” for eligible beneficiaries within the required timeframe. For more information, refer to 7.2.1. Age limits and application for the BCTESG.

For the transitional period for children born in 2006, 2007, 2008 and 2009, special dates apply. The transaction date of the BCTESG request must fall into the following date ranges:

• for children born in 2006, from August 15, 2016, to August 14, 2019
• for children born in 2007, from August 15, 2015, to August 14, 2018
• for children born in 2008, from August 15, 2015, to August 14, 2018
• for children born in 2009, from August 15, 2015, or the day the beneficiary turns 6 (whichever is later) to August 14, 2018, or the day before the beneficiary turns 9 in 2018 (whichever is later)

For children born in 2010 or later, the transaction date of the BCTESG request when compared to their birth date must fall into the following age range:

• from the beneficiary’s 6th birthday to the day before the beneficiary’s 9th birthday

If the transaction date for the BCTESG request does not satisfy these requirements:

• the CESP system will process the BCTESG transaction
• the CESP system will not pay the BCTESG, and
• the promoter will receive a refusal reason 3 (Age of Beneficiary) in a record “911” of their Transaction Processing Report

7.5.4.2. Refusal reason D (late transaction)

Sometimes, promoters submit incorrect information or make formatting errors in their BCTESG request transactions (411-40). In that case, they must correct and resubmit those transactions to the CESP system in another file. If they send a file more than 3 years after the original transaction date of a BCTESG request in the file:

• the CESP system will process the BCTESG transaction, and
• the promoter will receive a refusal reason D (late transaction) in a record “911” of their Transaction Processing Report

7.6. Repaying the BCTESG

Withdrawal of contributions will not trigger repayment of BCTESG but other circumstances may require the repayment of the BCTESG. For more information, refer to 7.6.2. Repayment circumstances.

7.6.1. Repayment process

The promoter must:

1. recognize and identify circumstances that require BCTESG repayment
2. determine BCTESG amounts to repay, and
3. submit the required financial transaction(s) to the CESP system, indicating the amounts and repayment reasons. For more information, refer to 7.6.3. Submitting repayment information to the CESP system

Promoters initiate a BCTESG repayment from an RESP by submitting a transaction to the CESP system. It will indicate the amount of BCTESG to repay and the repayment reason. ESDC makes monthly direct deposits for each promoter. This includes all incentive payments made for all successfully processed transactions submitted by the promoter in the previous month. The CESP system subtract all repayment amounts for the previous month from the amount that it would normally pay to promoters in their next direct deposit.

7.6.2. Repayment circumstances

There are a number of circumstances in which the promoter must repay the BCTESG.

The promoter must repay the BCTESG when:

• they terminate the RESP
• the CRA revokes the registration of the RESP
• all or part of the BCTESG was withdrawn from the RESP and not used as an EAP
• the promote makes an accumulated income payment (AIP)
• the promoter makes a payment to a designated educational institution
• the promoter makes an EAP to an individual who is not a beneficiary under the RESP
• an ineligible transfer occurs
• an ineligible beneficiary replacement occurs
• the promoter adds a beneficiary, who is not a sibling, to a sibling only RESP after the BCTESG is paid into this RESP
• an application for the BCTESG contained false information

7.6.2.1. Calculating BCTESG repayments

If the promoter repays BCTESG for any of the above reasons, the amount repayable is the lesser of:

• the total balance of the BCTESG account (immediately before the triggering event), and
• the fair market value of the property held in the RESP (immediately before the triggering event)

7.6.3. Submitting repayment information to the CESP system

Financial transactions (record type “400”) are used to record the movement of funds into or out of the RESP (with the exception of earnings). A BCTESG repayment (or any other incentive administered by ESDC) is considered to be a financial transaction.

When submitting BCTESG repayment information to the CESP system, the promoter will submit the following transaction to the CESP system:

• record type “400”, transaction type “21” (Grant repayment)

In addition, the transaction will identify the BCTESG repayment reason (or flag), with one of the following codes:

• 02: Accumulated income payment (AIP)
• 03: Contract termination
• 04: Ineligible transfer
• 05: Ineligible Beneficiary Replacement
• 06: Payment to Educational Institution
• 07: Revocation (of the plan)
• 08: Ceases to meet sibling only condition
• 11: Other

In all repayment transactions, promoters must also report the BCTESG that they repay to the CESP system. For more detailed information about how transactions are processed between the promoter and the CESP system, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards.

7.6.4. How funds are used to repay BCTESG

When processing a repayment, promoters must take into consideration whether or not there are sufficient funds in the RESP at the time repayment is required.

7.6.4.1. When sufficient funds exist in the RESP and the plan is terminated

When the plan is terminated and there are sufficient funds in the RESP, the promoter will repay the BCTESG and any other incentives from the corresponding RESP account(s).

7.6.4.1.1. Example – When sufficient funds exist in the RESP and the promoter terminates the plan

A subscriber terminated an Individual RESP with the following account balances because the beneficiary will never be eligible for an EAP. The promoter must repay all incentives because they terminated the plan.

The RESP accounts balance is:

• RESP market value: $27,275
• earnings: $9,375
• contributions: $14,000
• BCTESG: $1,200
• Canada Education Savings Grant (CESG): $2,800

In summary:

• BCTESG repayable = $1,200
• CESG repayable = $2,800
• Total repayable = $4,000

In this example, the promoter would withdraw the funds from the RESP and submit the following grant repayment transaction “400 21” to the CESP system:

• “400-21” (03) Reason code = 03 (Contract termination), $1,200 in the BCTESG amount field, $2,800 in the CESG amount field

7.6.4.2. When insufficient funds exist in the RESP and the plan is terminated

When the promoter terminates the RESP, they must repay all federal and provincial education savings incentives in the plan.

When the RESP has experienced a loss and there are insufficient funds to cover the total BCTESG amount repayable, the promoter must report it to the CESP. In order to do so, they will submit a termination adjustment transaction to the CESP system to report the shortfall.

Losses are first attributed to earnings, and then to contributions. Once these notional accounts are depleted, any remaining losses are apportioned equally across the federal and provincial education savings incentives that are remaining in the RESP.

Promoters must use a repayment formula for the federal education savings incentives in cases where the fair market value is less than the total of the balance of the CESG and the CLB.

The list of events that triggers repayments when there is a significant investment loss in an RESP is described in the Canada Education Savings Regulations, subsection 11(3).

Formula to repay the federal education savings incentives in cases where the fair market value is less than the total of the balance of the CESG and the CLB.

7.6.4.2.1. Example – When insufficient funds exist in the RESP and the promoter terminates the plan

A subscriber terminated an Individual RESP because the beneficiary will never be eligible for an EAP. All the federal and provincial incentives must be repaid proportionally. This happens because the plan is terminated and has experienced a loss. Also, there are insufficient funds to cover the total amount of incentives repayable.

The RESP balance is:

• RESP market value: $3,800
• earnings: $0
• contributions: $14,000
• BCTESG: $1,200
• Canada Education Savings Grant (CESG): $2,800

In this example, the total amount of incentives that would normally be repayable ($1,200 + $2,800 = $4,000) exceeds the market value of the RESP ($3,800). Therefore, the following calculations are required to determine the actual repayable amount for each incentive.

Based on the federal education savings incentives repayment formula, the RESP promoter must repay $2,660 in CESG.

Calculation: Amount of the CESG to be repaid to ESDC:

• ($3,800 × $2,800) / ($2,800 + $1,200) = $2,660

The remaining $1,140 in the RESP would be repaid as the BCTESG.

Calculation: Amount of the BCTESG to be repaid to ESDC:

• $3,800 – $2,660 = $1,400
• BCTESG repayable = $1,140
• CESG repayable = $2,660
• Total repayable = $3,800

In this example, the promoter would withdraw the funds from the RESP and submit the following grant repayment transaction “400-21” to the CESP system:

• “400-21” (03) Repayment reason code = 03 (Contract termination), $1,140 in the BCTESG amount field, $2,660 in the CESG amount field

Next, it will be necessary to determine the shortfall and submit the appropriate termination adjustment transaction to the CESP system. To determine the shortfall for each incentive, subtract the amount that can be paid (calculated above) from the incentive notional account balance. The following list shows the results of this calculation:

• BCTESG:
  • notional account balance: $1,200
  • amount payable (refer above): $1,140
  • termination adjustment: $60
• CESG:
  • notional account balance: $2,800
  • amount payable (refer above): $2,660
  • termination adjustment: $140
• shortfall:
  • termination adjustment: $200

The promoter must submit the following termination adjustment transaction “400 22” to inform ESDC of the $200 shortfall:

• “400-22” $60 in the BCTESG amount field, $140 in the CESG amount field

7.7. Other transactions involving the BCTESG

The subscriber could ask the promoter to handle other transactions involving BCTESG including:

• transferring funds (including BCTESG) from one RESP to another

  For more information, refer to Chapter 9. Registered Education Savings Plan transfers and the education savings incentives

• responding to a request for an EAP and calculating the BCTESG portion of the EAP

  For more information, refer to Chapter 10. Post‑secondary education and educational assistance payments