CESP - RESP provider user guide Introduction

Disclaimer: RESP promoters

The information contained on this page is technical in nature and is intended for Registered Education Savings Plan (RESP) and Canada Education Savings Program promoters. For general information, visit the RESP section.

Chapter 1-1: ESDC's Canada Education Savings Program

Employment and Social Development Canada (ESDC) is responsible for the administration and delivery of two federal education savings incentives linked to Registered Education Savings Plans (RESPs), as well as provincial education savings incentives on behalf of certain provinces. Within ESDC, the Canada Education Savings Program (CESP) provides the delivery mechanism and necessary system supports for the effective administration of the federally administered education savings incentives.

This chapter provides an at-a-glance overview of each of the education savings incentives. It also outlines the roles and responsibilities of the individuals and organizations that facilitate and participate in the process associated with each incentive.

See Appendix C for a list of acronyms and terms used in this guide.

1. Education savings incentives

The purpose of education savings incentives is to encourage Canadian residents to save for a child’s post-secondary education which includes full-time and part-time studies at a trade school, CEGEP, college, university, or an apprenticeship program.

The following education savings incentives are administered by ESDC:

  • Canada Education Savings Grant (CESG)
  • Canada Learning Bond (CLB)
  • Saskatchewan Advantage Grant for Education Savings (SAGES)
  • British Columbia Training and Education Savings Grant (BCTESG)

In addition, the Government of Quebec offers the Quebec Education Savings Incentive (QESI), a provincial education savings incentive paid under Quebec legislation. ESDC does not administer the QESI.

The Canada Education Savings Act authorizes the payment of the CESG and the CLB.

All provincial education savings incentives are paid under the laws of a province (known under the Income Tax Act as designated provincial programs). Payments made into an RESP through a designated provincial program are not considered contributions in an RESP, but are treated in the same way as the CESG and the CLB.

1.1. CESG at-a-glance

The CESG consists of a basic amount of the CESG (Basic CESG) (introduced in 1998) and an additional amount of CESG (Additional CESG) (introduced in 2005) paid on contributions made to an RESP, which are:

  • Basic CESG rate of 20% on annual contributions made to an RESP in respect of a beneficiary. 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
    • annual limit of $1,000 per beneficiary
  • Additional CESG rate of 10% or 20% on the first $500 or less of annual contributions made in respect of a beneficiary, based on the adjusted income of the beneficiary’s primary caregiver (PCG).
Eligibility for the Additional CESG

Additional CESG rates are based on the individual primary caregiver’s adjusted income:

  • Additional 10% Adjusted income is greater than $47,630 Footnote 1 but less than or equal to $95,259 Footnote 1
  • Additional 20% Adjusted income is less than or equal to $47,630 Footnote 1 or the child is in the care of an Agency which receives payments under the Children’s Special Allowances Act (CSAA)

Through an information sharing process with ESDC, the CRA confirms those beneficiaries eligible to receive the Additional 10% and 20% CESG, based on their individual primary caregiver’s adjusted income.

To learn more about the CESG eligibility criteria, information requirements, program-related rules, and application processes, see Chapter 2-1: Canada Education Savings Grant (CESG).

1.1.1. Grant room and carry forward

As of 1998, grant room (unused Basic CESG) accumulates for a child until the end of the year in which the child turns 17, even if the child is not a beneficiary of an RESP. Unused Basic CESG can be carried forward for possible use in future years.

  • 1998 to 2006: $400 is added to the grant room for each eligible child per year since 1998 (or since birth if the child was born after 1998).
  • Since 2007: $500 is added to the grant room for each eligible child per year since 2007 (or since birth if the child was born after 2007).

A determination of eligibility for the Additional CESG is made annually, based on reported income information applicable at that time. Consequently, rights to the Additional CESG cannot be carried forward for use in future years. Grant room is not affected by the Additional CESG payments made to an RESP in respect of a beneficiary.

1.2. CLB at-a-glance

The CLB is available for an eligible child born in 2004 or later. Since July 1, 2017, the CLB eligibility is based, in part, on the number of qualified children and the adjusted income of the individual primary caregiver, who is the person eligible to receive 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 (CSAA).

The CLB is a federal education savings incentive directed to a specific child and consists of two types of payments:

  • an initial CLB payment of $500 for the first year the child is eligible; and
  • subsequent CLB payments of $100 for each following year that the child is eligible, up to and including the year in which the child turns 15.

The maximum lifetime CLB limit is $2,000. The amount of CLB that a beneficiary receives is dependent on how many years the beneficiary meets the eligibility criteria. Accumulated CLB entitlements can be requested up to the eligible child’s 21st birthday. After that, all accumulated CLB entitlements will be forfeited.

CLB entitlements tracked by ESDC

ESDC will keep track of the CLB entitlements as they accumulate for each child, even when the child has not been named as the beneficiary of an RESP.

The CLB does not depend on contributions made to the RESP. However, a subscriber must open an RESP and name a child as a beneficiary before the CLB entitlements can be paid.

To learn more about the CLB eligibility criteria, information requirements, program-related rules, and application processes, see Chapter 2-2: Canada Learning Bond (CLB).

1.3. BCTESG at-a-glance

The BCTESG is available for children born on or after January 1, 2006.

The custodial parent or a legal guardian and the beneficiary must be residents of British Columbia when the BCTESG application is made.

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

To learn more about the BCTESG eligibility criteria, information requirements, program-related rules, and application processes and timelines, see Chapter 2-3: British Columbia Training and Education Savings Grant

1.4. SAGES at-a-glance

Note:

On March 22, 2017, the Government of Saskatchewan announced in their provincial budget that the SAGES will be suspended as of January 1, 2018, and until further notice. Additional information pertaining to the suspension of the SAGES is provided in information bulletin # 722 sent June 12, 2017, available through the Canada.ca/RESPresources Web page.

The SAGES is available for RESP contributions made on or after January 1, 2013, in respect of beneficiaries who are residents of Saskatchewan at the time of contribution.

Saskatchewan matches 10% of RESP contributions in the SAGES amounts, up to $250 per beneficiary for each eligible year, until the end of the calendar year in which the beneficiary turns 17. Total SAGES payments per beneficiary could reach $4,500 if the beneficiary is eligible from birth until age 17.

While each eligible beneficiary’s SAGES grant room increases by $250 per eligible year, the annual SAGES amount that can be paid per beneficiary is limited to the lesser of the following two amounts:

  • the accumulated SAGES grant room for the beneficiary; or
  • the SAGES annual limit of $500

To learn more about the SAGES eligibility criteria, information requirements, program-related rules, and application processes and timelines, see Chapter 2-4: Saskatchewan Advantage Grant for Education Savings (SAGES).

2. An overview of roles and responsibilities

To administer the payment of education savings incentives, ESDC partners with:

  • RESP promoters
  • the CRA
  • the Social Insurance Registry (SIR)
  • the Government of Saskatchewan
  • the Government of British Columbia

Each organization shares information and manages processes that enable ESDC to deposit the education savings incentives into an RESP in respect of an eligible beneficiary.

The following individuals also play a key role in an RESP opened in respect of a beneficiary:

  • the subscriber(s)
  • the custodial parent(s) or legal guardian(s)
  • the primary caregiver and their cohabiting spouse or common-law partner, if applicable

The following pages provide an overview of their respective roles and responsibilities, starting with the subscriber.

2.1. Subscriber

In order for a beneficiary to receive any of the education savings incentives, the subscriber must meet with a participating RESP promoter and:

  • open an education savings plan (ESP), name a beneficiary, and request that the ESP be registered with the CRA via the CESP system.

    Note: To receive the Additional CESG, the CLB, the SAGES and the BCTESG, the ESP must be an individual (non-family) plan, or a family plan in which all beneficiaries are siblings, and it must be registered by the CRA.

  • ensure the beneficiary meets all eligibility criteria for the education savings incentive(s)
  • make contributions to the RESP without exceeding the lifetime limit of $50,000 per beneficiary .

    Note: Payment of the CLB and the BCTESG do not depend on contributions. However, the deposit of contributions is a pre-requisite for the CESG, and the SAGES.

  • apply for the incentive(s) in respect of an eligible beneficiary by completing the appropriate application form. See Appendix A: Application form – Education savings incentives
Note: Information required from the subscriber

To register the ESP, the subscriber must present the RESP promoter with the following information:

In all cases:

  • The subscriber's Social Insurance Number (SIN)
  • The beneficiary's SIN, name, sex and date of birth

If applying for the Additional CESG and/or the CLB:

  • The SIN of the individual PCG or the PCG’s cohabiting spouse or common-law partner

    or

  • The Business Number (BN) of the public PCG responsible for the child when the child is in care of an agency.

The subscriber is responsible for informing the RESP promoter of any changes to beneficiary information (e.g. change of residency).

2.2. Custodial parent or legal guardian

Payment of the education savings incentives administered by ESDC requires the beneficiary’s SIN.

As a first step, the custodial parent or legal guardian must:

  • obtain a copy of the child's birth certificate
  • apply for and obtain a SIN for the child

For the SAGES, the subscriber and the parent or legal guardian (if applicable) must complete and sign the Application for the Saskatchewan Advantage Grant for Education Savings. For the BCTESG, the subscriber and the parent or legal guardian (if applicable) must complete and sign the Application for the British Columbia Training and Education Savings Grant.

2.3. PCG, cohabiting spouse or common-law partner

A person is the individual PCG of a beneficiary if they are eligible to receive the CCB for the beneficiary.

An individual PCG or, as of January 1, 2018, their cohabiting spouse or common-law partner, if applicable, must provide their name and SIN on the CESP application form to request the CLB and the Additional CESG. The PCG’s adjusted income is used, in part, to validate eligibility for the CLB and the Additional CESG.

By completing and signing the CESP application form, this person is providing their information to validate eligibility for the Additional CESG or the CLB. They are also designating the RESP to receive these incentives in trust.

The CRA calculates an individual PCG’s adjusted income using, in part, the net income reported on line 236 of tax returns filed by the individual PCG, and that of their cohabiting spouse or common-law partner, if applicable.

An organization is the public PCG of a beneficiary if it is entitled to receive payments for the beneficiary under the CSAA. A public PCG must provide their business number (BN) to request the Additional CESG and the CLB.

2.4. RESP promoter

Throughout the RESP life cycle, the RESP promoter is responsible for managing the information and transactional processes associated with the RESP and education savings incentives requirements.

These responsibilities include the following:

  • Enroll with the CRA as an RESP promoter. During this process, RESP promoters will submit proposed Specimen Plans to the CRA. Upon approval, they will receive a specimen number for each plan.
  • Enroll with ESDC as a participating RESP promoter. This requires the RESP promoter and their trustee to:
    • enter into a formal agreement with ESDC in order to offer the applicable education savings incentives
    • undergo and pass industry system testing to ensure compliance with the CESP system requirements

For more information about the enrollment process contact ESDC at: NC-INSCRIPTION_ENROLMENT-GD@hrsdc-rhdcc.gc.ca

Once recognized as a participating RESP promoter, promoters can assist their clients in opening RESPs so that eligible beneficiaries can benefit from the education savings incentives administered by ESDC.

The RESP promoter is responsible for:

  • collecting from the subscriber the information required to open and register an ESP and to apply for the education savings incentive(s). This information must be protected according to federal and provincial privacy requirements. See 3. Federal and provincial privacy requirements.
  • registering ESPs with the CRA via the CESP system;
  • assisting subscribers in applying for the applicable education savings incentives in respect of eligible beneficiaries;
  • submitting contract and financial information to the CESP system. This information includes RESP and incentive-related data and is submitted to the CESP system electronically, according to a specified format. See Chapter 1-3: CESP system and Interface Transaction Standards (ITS);
  • ensuring contributions (assisted and unassisted), earnings, the CESG, the CLB and provincial incentives (such as the SAGES, the BCTESG and the QESI) are tracked using separate RESP notional accounts in an RESP;
  • advising the subscriber when incentive payments are received or if repayments are required;
  • transferring funds to another RESP based on direction from the subscriber. This may include collaborating and communicating with other RESP promoters;
  • maintaining a record of all RESP transactions. This information, which must be reported to the CESP system, includes all:
    • contributions
    • withdrawals
    • educational assistance payments (EAPs)
    • transfers
    • other transactions
  • receiving requests for EAPs from the subscriber or beneficiary, and verifying the beneficiary’s eligibility for such payments;
  • making EAPs and calculating the portion of the EAP attributable to each incentive. See Chapter 3-2: Post-secondary education and educational assistance payments (EAPs); and
  • advising the subscriber of potential options for distributing funds remaining in the RESP prior to terminating the RESP, including:
    • accumulated income payment (AIP);
    • rollover of RESP investment earnings into a Registered Disability Savings Plan (RDSP);
    • rollover of RESP investment earnings into the Registered Retirement Savings Plan (RRSP) of the subscriber or the subscriber’s spousal RRSP; or
    • payment to a designated post-secondary educational institution.

      See Chapter 3-3: Options for assets remaining in the RESP.

Unless otherwise specified, the procedures associated with each of the above responsibilities are included in Section 2: Education savings incentives.

2.5. Employment and Social Development Canada

ESDC is responsible for the administration and delivery of a number of education savings incentives available to eligible beneficiaries of RESPs. Within ESDC, the CESP provides the delivery mechanism and necessary system supports for the effective administration of these incentives. The CESP:

  • receives the contract, beneficiary, and subscriber information needed to register ESP contracts, verifies this information, and communicates the request to register the ESP with the CRA;
  • administers the education savings incentives authorized by the Canada Education Savings Act. This includes the CESG and the CLB;
  • determines eligibility for the Additional CESG and for the CLB, based on information pertaining to the beneficiary’s primary caregiver. This information is obtained through an information-sharing process with the CRA;
  • processes the SAGES payments in collaboration with the Government of Saskatchewan;
  • processes the BCTESG payments in collaboration with the Government of British Columbia; and
  • receives and processes transactions submitted to the CESP system. This includes information associated with:
    • the RESP contract;
    • the beneficiary and subscriber; and
    • various financial transactions.

The procedures within this guide outline how the CESP system interacts with the RESP promoter in each of these circumstances.

2.6. Canada Revenue Agency

The effective administration of the CESP depends on the collaborative partnership with the CRA.

The CRA is responsible for:

  • administering the registration of ESPs according to the requirements set out under the Income Tax Act (ITA);
  • sharing information for the purposes of confirming a beneficiary’s eligibility for the Additional CESG and the CLB; and
  • confirming a beneficiary is a child in care of an agency receiving payments under the CSAA.

For the purposes of the Additional CESG, the CRA validates eligibility based on the adjusted income level of the beneficiary’s individual primary caregiver. See Chapter 2-1: Canada Education Savings Grant (CESG).

For the purposes of the CLB, the CRA validates eligibility based, in part, on the number of qualified children and the adjusted income of the beneficiary’s individual primary caregiver. See Chapter 2-2: Canada Learning Bond (CLB).

2.7. Saskatchewan Government

The Government of Saskatchewan:

  • funds the SAGES program; and
  • has an agreement with ESDC to deliver this education savings initiative.

Within ESDC, the CESP utilizes its system and the existing program framework to administer and deliver the SAGES on behalf of the province of Saskatchewan.

Note: On March 22, 2017, the Government of Saskatchewan announced in their provincial budget that the SAGES will be suspended as of January 1, 2018, and until further notice. Additional information pertaining to the suspension of the SAGES is provided in information bulletin # 722 sent June 12, 2017, available through the Canada.ca/RESPresources Web page.

See Chapter 2-4: Saskatchewan Advantage Grant for Education Savings (SAGES).

2.8. British Columbia Government

The Government of British Columbia:

  • funds the BCTESG program; and
  • has an agreement with ESDC to deliver this initiative.

Within ESDC, the CESP utilizes its system and the existing program framework to administer and deliver the BCTESG on behalf of the province of British Columbia.

See Chapter 2-3: British Columbia Training and Education Savings Grant.

3. Federal and provincial privacy requirements

When applying for education savings incentives, certain eligibility criteria associated with the RESP and education savings incentives require the RESP promoter to collect information about:

  • the subscriber;
  • the beneficiary;
  • the custodial parent or legal guardian; and
  • the PCG or the individual PCG’s cohabiting spouse or common-law partner.

Federal and provincial privacy legislation stipulates how organizations in the private sector must manage the collection, storage and use of personal information. Therefore, when assisting clients to apply for the education savings incentives, it is important to be aware of and understand the privacy legislation in place in each jurisdiction. These are summarized below.

3.1. Federal privacy legislation

Canada has two federal privacy laws:

  • Privacy Act
  • Personal Information Protection and Electronic Documents Act (PIPEDA)

The Privacy Act gives individuals the right to access and request correction of their personal information held by federal government institutions, and specifies how the government can collect, use, disclose, and retain personal information. It requires that government institutions develop and maintain an index of personal information holdings called Personal Information Banks (PIBs).

The index is a means of organizing information for the purpose of public access and ensures that PIBs are registered, approved, and identified in Info Source.

The Act provides the legal framework for protecting personal information, accessing personal information, data-matching, and controlling the use of SINs. For more information about the Privacy Act, visit the web site of the Office of the Privacy Commissioner of Canada.

The PIPEDA is federal legislation that protects personal information. PIPEDA sets out principles that organizations, individuals, associations, partnerships, and trade unions must follow when collecting, using, and disclosing personal information in the course of a commercial activity.

PIPEDA applies to the commercial activities of the federally regulated private sector (such as banks), the retail sector, publishing companies, the service industry, manufacturers, and other provincially regulated organizations.

For more information about PIPEDA, visit the web site of the Office of the Privacy Commissioner of Canada.

The federal government may exempt organizations or activities in provinces that have their own privacy laws if they are substantially similar to the federal law. PIPEDA will continue to apply in those provinces to the federally regulated private sector and to personal information in inter-provincial and international transactions by all organizations engaged in commercial activities.

Oversight of both federal Acts rests with the Privacy Commissioner of Canada who is authorized to receive and investigate complaints.

3.2. Provincial privacy legislation

The province of Saskatchewan has its own privacy legislation named the Freedom of Information and Protection of Privacy Act (FOIP).

The FOIP governs the collection, use, and disclosure of personal information by a government institution. It provides individuals with a general right of access to, and correction of, their personal information.

For more information about FOIP, visit the web site of the Office of the Information and Privacy Commissioner of Saskatchewan.

The province of British Columbia has its own privacy legislations named the:

  • Freedom of Information and Protection of Privacy Act (FIPPA).
  • Personal Information Protection Act (PIPA)

In the public sector, FIPPA gives individuals the right to request records that contain their personal information, as well as records such as reports, audits, and financial information of the public body.

In the private sector, PIPA gives individuals the right to request access to their personal information in the custody or control of a private sector organization.

Both FIPPA and PIPA set out the rules that public bodies and organizations must follow when handling personal information, including the collection, use and disclosure of personal information.

For more information about FIPPA and PIPA, visit the web site of the Office of the Information and Privacy Commissioner for British Columbia.

4. The education savings incentives processes – an overview

The following illustration provides an overview of the application and payment process for the education savings incentives administered by ESDC.

  1. Open education savings plan (ESP) and have it Registered (RESP)*

    (See section 1, Chapter 1-4: Registered Education Savings Plans (RESPs))

  2. Assist subscriber in reviewing the beneficiary's eligibility for the education savings incentive(s)
  3. Complete the appropriate application form(s) and apply for the incentive(s)*

    (See section 2, Education savings incentives, and Appendix A: Application form – education savings incentives)

  4. Facilitate any transfers between RESPs

    (See section 3, Chapter 3-1: RESP transfers and the Education savings incentives)

  5. Receive, deposit, track incentive payments in RESP accounts
  6. Submit repayment of incentive(s) if required*
  7. Make EAPs to eligible beneficiaries attending post-secondary education*

    (See section 3, Chapter 3-2: Post-secondary education and educational assistance payments (EAPs)

  8. Assist subscriber in distributing remaining RESP earnings

    (See section 3, Chapter 3-3: Options for assets remaining in the RESP )

* Requires the submission of electronic transactions to the CESP System. For more information about submitting these transactions, see Chapter 1-3: CESP system and Interface Transaction Standards (ITS).

Chapter 1-2: Key concepts

There are a number of legislative and program elements that govern the delivery and administration of the following education savings incentives:

  • Canada Education Savings Grant (CESG)
  • Canada Learning Bond (CLB)
  • Saskatchewan Advantage Grant for Education Savings (SAGES)
  • British Columbia Training and Education Savings Grant (BCTESG)

Throughout this guide, these elements are referred to as “key concepts”. Unless otherwise indicated, the key concepts in this chapter apply to all education savings incentives. To view concepts that are unique to a particular incentive, refer to the related chapter in Section 2: Education savings incentives. Relevant key concepts appear immediately following the corresponding eligibility criteria.

An understanding of these concepts and requirements will allow Registered Education Savings Plan (RESP) promoters to assist the subscriber to apply for, and receive, the education savings incentive(s) for which they qualify.

See Appendix C for a list of acronyms and terms used in this guide.

1. Legislative authorities – ESDC and the CRA

ESDC and the Canada Revenue Agency (CRA) work together in administering the education savings incentives and RESPs. They do so under the following legislative authorities:

  • The Income Tax Act (ITA) governs RESPs – the vehicle used to deposit education savings incentives and save for the beneficiary's post-secondary education.
  • The Canada Education Savings Act CESA authorizes payment of the CESG and the CLB.
  • The Canada Education Savings Regulations determine eligibility and on-going administration of the CESG and the CLB.
  • The Saskatchewan Advantage Grant for Education Savings Act authorizes the payment of the SAGES.
  • The Special Accounts Appropriation and Control Act authorizes the payment of the BCTESG.

2. RESPs

The subscriber initiates the incentive application process by entering into an education savings plan (ESP) with an RESP promoter and requesting the ESP to be registered with the CRA. Once successfully registered, it becomes an RESP. The RESP then becomes the account for contributions, education savings incentive payments, and accumulated earnings. See Chapter 1-4: Registered Education Savings Plans (RESPs).

Certain incentives may have particular RESP-related requirements. Such requirements are addressed within the related incentive chapters in Section 2: Education savings incentives.

3. RESP contribution limits

From 1998 to 2006, the ITA limited RESP annual contributions to a maximum of $4,000 and lifetime contributions to a maximum of $42,000 per beneficiary. For 2007 and future years, there is no longer an annual contribution limit and the lifetime contribution limit is $50,000 per beneficiary.

The payment of education savings incentives into an RESP are not considered to be RESP contributions and are not included when calculating RESP contribution limits.

4. Social Insurance Number

The Social Insurance Number (SIN) is a key information element used by the CESP system. See Chapter 1-3: The CESP System and Interface Transaction Standards (ITS).

A SIN is also needed for both the subscriber and beneficiary in order to establish and register an ESP.

Requesting the Additional CESG and the CLB also requires SIN information of the individual primary caregiver (PCG) or their cohabiting spouse or common-law partner. However, if a beneficiary is in care of a public PCG, their business number (BN) is required to request these education savings incentives.

When applying for education savings incentives, verify SIN requirements outlined with the individual education savings incentive chapters in Section 2: Education savings incentives.

5. The beneficiary's SIN – a unique identifier

The beneficiary's SIN is used by the CESP system to:

  • Provide the CRA with registration information about the plan.
  • Track RESP contributions and education savings incentive payments for the beneficiary.
  • Determine if the beneficiary's contribution and education savings incentive limits have been reached.

As the beneficiary’s SIN information is subject to rigorous validation checks, it is critical to verify the accuracy of this information when completing the RESP process and applying for education savings incentives.

Accurate information ensures that education savings incentive requests can be processed

The beneficiary must be established in the CESP system before a request for an education savings incentive can be processed. To do this, the beneficiary’s SIN is compared and validated against five key data elements held in the Social Insurance Registry (SIR):

  • first name
  • last name
  • date of birth
  • SIN
  • sex

When applying for the education savings incentives, the RESP promoter must submit beneficiary information that matches the data held at SIR. Otherwise, an error report will be sent to the RESP promoter, identifying the field(s) in error. Until the correction is made and resubmitted to the CESP system, payment of the education savings incentives will be delayed. See Chapter 1-3: The CESP system and Interface Transaction Standards (ITS).

Custodial parents and legal guardians can request a free confirmation of the beneficiary’s SIN information at a Service Canada office to avoid education savings incentive payment delays due to inaccurate information.

5.1. Applying for a SIN

The SIN application form and related information can be obtained from a Service Canada office or the following Web address: https://www.canada.ca/en/employment-social-development/services/sin.html.

6. Notional accounts and the education savings incentives

An RESP is comprised of the following notional accounts:

  • assisted contributions made to the RESP by the subscriber
  • unassisted contributions made to the RESP by the subscriber
  • CESG – combines the Basic CESG and the Additional CESG
  • CLB – maintained in separate notional accounts for each beneficiary
  • provincial incentives - maintained in separate notional accounts for each designated provincial program
  • earnings

RESP promoters are responsible for maintaining records and books of account to enable ESDC to determine if the education savings incentives can eligibly be paid or are required to be repaid.

When a financial transaction is processed in respect of the beneficiary, funds are deposited into or withdrawn from the appropriate notional account depending on the nature of the transaction.

For example, contributions are deposited into the contribution notional account and education savings incentives are deposited into the related notional accounts (e.g. the CESG is deposited into the CESG notional account).

For education savings incentives administered by ESDC, the CESP system tracks these various activities, by beneficiary, to ensure limits are not exceeded. Also, if all or a portion of an education savings incentive must be repaid, the amount will ultimately be withdrawn (repaid) from the notional account of that incentive.

Requirements for reporting RESP transactions to the CESP system are specified in the CESP Interface Transaction Standards (ITS) which can be downloaded from Canada.ca/RESPresources under the Systems Documentation tab.

6.1. Provincial incentives

An RESP 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 BCTESG have notional accounts to track all activities associated with the BCTESG. As ESDC administers the BCTESG, transactions associated with the BCTESG are reported to the CESP system using the BCTESG notional account.
  • Promoters delivering the SAGES have notional accounts to track all activities associated with the SAGES. As ESDC administers the SAGES, transactions associated with the SAGES are reported to the CESP system using the SAGES notional account.
  • Promoters delivering the Quebec Education Savings Incentive (QESI) have notional accounts to track all activities associated with the QESI. As ESDC does not administer the QESI, promoters do not report specific QESI amounts associated with RESP transactions to the CESP system.
Reporting QESI data to the CESP system

Promoters must include all assets in RESPs when reporting the fair market value (FMV) of an RESP in their monthly summary reports (RT 700). As such, the FMV amount should include education saving incentives from all sources present in the RESP, including the QESI if applicable.

Promoters are not required to report specific QESI amounts in educational assistance payment (EAP) transactions reported 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.

7. Key concepts specific to incentives

There are other important key concepts that are associated with, and unique to, each of the education savings incentives. These are defined and elaborated on within each related chapter in Section 2: Education savings incentives, and can be found immediately after the corresponding eligibility criteria.

Chapter 1-3: The CESP system and Interface Transaction Standards

Once the appropriate forms have been completed and signed, key information must be sent electronically to the Canada Education Savings Program (CESP) system, along with transactions for the incentive(s) administered by Employment and Social Development Canada (ESDC). This is usually handled by the Registered Education Savings Plan (RESP) promoter’s back office or by an external service provider.

The RESP promoter plays a key role to ensure the CESP system receives the information it requires to:

  • register Education Savings Plans with the Canada Revenue Agency (CRA);
  • process transactions for the following incentives administered by ESDC:
    • Canada Education Savings Grant (CESG)
    • Canada Learning Bond (CLB)
    • Saskatchewan Advantage Grant for Education Savings (SAGES)
    • British Columbia Training and Education Savings Grant (BCTESG)

This chapter provides an overview of the CESP system and the type of information exchanged between the RESP promoters and the CESP system.

See Appendix C for a list of acronyms and terms used in this guide.

1. CESP system overview

1.1. What is the CESP system

The CESP system is an ESDC electronic application that supports the delivery of federal and provincial education savings incentives administered by ESDC. The CESP system enables the exchange of electronic information with the following partners:

  • RESP promoters
  • Social Insurance Registry (SIR)
  • Canada Revenue Agency (CRA)

When a subscriber opens an Education Savings Plan (ESP), the RESP promoter assists the subscriber in completing the appropriate forms and collects two categories of non-financial information:

  • information about the contract itself
  • information about the subscriber and the beneficiary

The RESP promoter submits the initial transactions for a new ESP to the CESP system. For more information, see 4.1. Transactions required to set up an RESP.

Once this information has been validated, the contract can be registered with the CRA to become an RESP and the beneficiary will be established in the CESP system. Financial transactions can then be processed for the beneficiary, such as:

  • contributions;
  • requests for incentives;
  • repayment of incentives;
  • educational assistance payments (EAPs);
  • etc.

Information exchanged between the RESP promoter and the CESP system allows ESDC to:

  • verify contract, subscriber, and beneficiary information;
  • submit requests to the CRA to register ESPs;
  • verify the primary caregiver (PCG) or the PCG’s cohabiting spouse or common-law partner information;
  • confirm eligibility for the incentives administered by ESDC;
  • monitor transactions related to limits for each beneficiary; and
  • track payments and repayments of incentives administered by ESDC.

The CESP system also generates reports concerning designated provincial programs administered by ESDC for the following provincial governments:

  • the Government of Saskatchewan
  • the Government of British Columbia

1.2. CESP system terminology

Some key terms related to the CESP system are used in this chapter and throughout this guide.

Business number (BN)
In the CESP system, the business number (BN) is a 15 character alphanumeric code that identifies the RESP promoter or agent authorized to submit transactions to the CESP system.
Interface Transaction Standards (ITS)
The Interface Transaction Standards (ITS) is a document that specifies the procedure for formatting and electronically submitting transactions to the CESP system.
See 2. Interface Transaction Standards (ITS).
Record type (RT)
The ITS uses a series of record types (RT) to categorize the information that is exchanged between the RESP promoter’s system and the CESP system. For example, RT 100 identifies a record that describes the contract information of an RESP. See 2.3. Record types and transaction types.
Transaction type (TT)
A two-digit number breaks down record types (RT) of promoter transactions into distinct transaction types (TT). For example, a financial transaction that reports an RESP contribution can be referred to as a 400-11 transaction. See 2.3. Record types and transaction types.

1.3. Monthly CESP system processing cycle

The CESP system processes transactions submitted by RESP promoters and pays the corresponding incentives on a monthly basis.

1.3.1. Managed secure file transfer

RESP promoters must use managed secure file transfer (MSFT) software to send data to the CESP system via the Internet. It is Entrust ® enabled and is recognized by ESDC as a secure method of data encryption.

1.3.2. Schedule of cut-off dates for production runs

ESDC provides schedules identifying applicable processing dates, which include:

  • processing periods
  • production run cut-off dates
  • payment dates

These schedules are forwarded to RESP promoters as an electronic bulletin. They are also available on the Systems documentation tab of the Canada.ca/RESPresources webpage.

1.3.3. Reporting and processing periods

Each calendar month corresponds to a specific reporting period in which promoters:

  • generate new RESP transactions as they occur; and
  • make corrections to transactions that were either rejected or not submitted accurately to the CESP system in previous periods.

Each processing period begins after the last day of the corresponding reporting period, on the first day of the following month. The CESP system processes promoter files that are submitted by 5 p.m., Eastern Time, on the fourth business day of each month. These files cannot include any transactions that occurred after the last day of the corresponding reporting period.

1.4. Process overview

The following overview describes how RESP transactions are processed by the CESP system.

  1. RESP promoter: Submits transactions electronically to the CESP system for the reporting period. Non-financial transactions are used to request registration of the ESP. Other transactions involve the incentives administered by ESDC. See 2.3 Record types and transaction types and 4. Setting up an RESP.
  2. CESP system: Retrieves the submitted transactions and uploads them to the CESP system.
  3. CESP system: Validates non-financial transactions:
    • Confirms completion of mandatory fields and proper formatting based on the ITS (e.g., date fields must be submitted as YYYYMMDD).
    • Verifies compliance with business rules (e.g. beneficiary’s age) and conducts Social Insurance Number (SIN) validation.

      SIN validation

      see 4.1.2. Beneficiary information (200-03)

      The CESP system conducts a preliminary validation on the SIN itself before submitting the remaining SIN information to SIR for validation.

      If the beneficiary SIN fails the preliminary CESP validation, the transaction is rejected and the promoter receives a RT 800 in the transaction error report.

      If the beneficiary SIN passes preliminary CESP validation, the beneficiary information is sent to SIR for validation.

      If SIR validation fails, the transaction is rejected and the promoter receives a RT 800 in the transaction error report that specifies which fields did not match.

      If SIR validation is successful, the beneficiary is added to the CESP system database and a RT 900 in the transaction processing report is sent to the RESP promoter.
  4. CESP system: Once all contract information has been validated, communicates to the CRA the request to register the ESP.
  5. CESP system: Processes transactions that have an impact on the incentives administered by ESDC. If the transaction includes a request for the CLB and/or the Additional CESG, the CESP system confirms the following with the CRA:
    • Information provided for the beneficiary’s PCG or the PCG’s cohabiting spouse or common-law partner matches CRA records for the beneficiary;
    • The beneficiary is a dependent of the PCG; and
    • The beneficiary is eligible for the CLB and/or the Additional CESG.
  6. CESP system: Generates reports to RESP promoters, informing them of the production results, including the payment or repayment of incentives administered by ESDC.

    CESP system reports

    see 3.1. Monthly CESP system reports

    The RESP promoter receives confirmation of the status for each transaction submitted to the CESP system using the following monthly system reports:
    • Transaction error report (RT 800) – advises that validation has failed or information submitted is missing, incorrect, or incorrectly formatted. The transaction must be corrected and resubmitted.
    • Severe error report (RT 850) - identifies severe errors and advises that the record is rejected and must be corrected and resubmitted.
    • Transaction processing report (RT 900 + RT 910 + RT 911) - acknowledges that a transaction has been successfully processed.
    • SIN validation report (RT 920) – advises that validation of the beneficiary’s SIN with SIR has revealed that the SIN is not usable, usable or linked.
    • Contract registration report (RT 950) - acknowledges that the contract is eligible for registration.
  7. CESP system: Based on processing results of financial information:
    • Updates beneficiary accounts, including the total amounts of incentives administered by ESDC paid in respect of each beneficiary.
    • Updates specimen plan information including the total amount paid for incentives administered by ESDC for each specimen plan to identify and track liability for these incentives.
  8. CESP system: Forwards an electronic bulletin to inform RESP promoters when report files are ready to be downloaded using MSFT.
  9. CESP system: Sends the payment to the RESP promoter’s account.
  10. RESP promoter: Uses the transaction processing report to update contract accounts. This could include:
    • information regarding ‘registerable’ status of the contract
    • payments or repayments of incentives administered by ESDC
    • transfers
    • EAPs
  11. RESP promoter: Uses the transaction error report and severe error report to identify rejected transactions and submit the required transactions to correct errors.

2. Interface Transaction Standards (ITS)

2.1. What is the ITS

The ITS specifies how RESP promoters and the CESP system exchange electronic information by:

  • outlining procedures for formatting and submitting transactions; and
  • describing how the CESP system validates and processes the transactions.

The ITS is available at Canada.ca/RESPresources under the Systems documentation tab. Amendments to the ITS are communicated to RESP promoters via an electronic bulletin.

2.2. What is a record

RESP promoters send files with RESP transactions to the CESP system for processing and the CESP system sends report files back to the promoters. Both files can contain any number of records.

A record is:

  • a series of up to 500 characters on one line;
  • a collection of fields in groups of adjacent characters; and
  • detailed information about one transaction.

2.3. Record types and transaction types

The record type (RT) and transaction type (TT) fields categorize promoter transaction records. For example, EAP transactions may be called “400-13” transactions because they have a RT of 400 (positions 1-3) and a TT of 13 (positions 42-43).

RT TT Description
Non-financial transactions required to register an RESP
100 01 Contract information
200 03 Beneficiary information
04 Subscriber information
Transactions with a financial impact on RESPs
400 11 Contribution (and possible request for the CESG)
13 EAP
14 PSE contribution withdrawal
19 Transfer in (contract)
21 Incentive repayment
22 Termination adjustment
23 Transfer out (contract)
24 Request for CLB payment
410 30 SAGES request
31 Cancel SAGES request
411 40 BCTESG request
41 Cancel BCTESG request
511 12 PCG/spouse information
Summary Records
700 None Summary report transaction (RESP fair market value)

2.4. Common fields in promoter transactions

The first seven fields (positions 1 to 68) are common and mandatory for all RESP promoter transactions. ITS validation rules identify other mandatory fields for each record type.

Field Name Position Notes
Record type 1-3 Identifies the record type
Transaction date 4-11 The date an event occurred
Format: YYYYMMDD
Promoter transaction ID 12-26 Unique number assigned by the promoter to track each transaction
Promoter BN 27-41 Unique number assigned to each promoter for the CESP system
Transaction type 42-43 Used to categorize the type of promoter transaction
Specimen plan ID 44-53 Unique number assigned by CRA for each specimen plan
Contract ID 54-68 Unique number assigned by the promoter to identify an RESP

The CESP system rejects all promoter transactions that do not include the mandatory information. Depending on which field is missing, the CESP system will generate either a RT 850 in the severe error report, or a RT 800 in the transaction error report with a 7005 error code.

2.5. Record types in CESP system reports

The record type (RT) also categorizes records generated by the CESP system in report files. The following table shows key record types used in these reports. See 3. CESP reports.

CESP system report files RT Frequency
Transaction error report (.err) 800 Monthly
Severe error report (.ser) 850
Transaction processing report (.pro)  
  • Financial transactions
900
  • SAGES transactions
910
  • BCTESG transactions
911
SIN validation report (.svr) 920
Contract registration report (.reg) 950
Referral report (.ref) 960 Daily

2.6. System compliance and industry testing

As part of the RESP promoter enrollment process, all participating financial institutions offering education savings incentives administered by ESDC must ensure their system can:

  • communicate with the CESP system; and
  • comply with the ITS.

The mandatory industry testing process helps financial organizations to ensure their system is ready to report transactions to, and receive information from, the CESP system.

Test files sent electronically to the CESP system must receive an industry testing score of 90% or higher before the RESP promoter can submit production files for processing.

The CESP Industry Testing Guide is available at Canada.ca/RESPresources under the Systems documentation tab.

3. CESP reports

3.1. Monthly CESP system reports

The CESP system acknowledges the processing status of each promoter transaction in monthly reports.

Status RT Monthly report
Processed RT 900 (CESG & CLB)
RT 910 (SAGES)
RT 911 (BCTESG)
Transaction processing report
Rejected RT 800 Transaction error report
RT 850 Severe error report

A “processed transaction” in this chapter is a transaction that was successfully processed by the CESP system. This includes incentive requests for which incentive payments were refused. The CESP system generates a refusal reason in response to an incentive request when the full amount of the incentive is not paid.

See Appendix F, Understanding refusal reasons.

A “rejected transaction” in this chapter means the transaction was not processed by the CESP system for one of the following reasons:

  • The transaction had an error which generated an error code.
  • The transaction had a severe error which generated an error type.

See Appendix E, Understanding error codes.

3.1.1. Transaction processing report (RT 900, RT 910 and RT 911)

RT 900 is used to send the following types of notifications:

  • successfully processed transactions for the CESG and the CLB
  • confirmation of the CESG paid on contributions
  • confirmation of the CLB
  • refusal reasons for the CESG and the CLB
  • other transactions

RT 910 is used to send the following types of notifications:

  • successfully processed SAGES transactions
  • confirmation of SAGES payments
  • refusal reasons for the SAGES
  • other transactions

RT 911 is used to send the following types of notifications:

  • successfully processed BCTESG transactions
  • confirmation of BCTESG payments
  • refusal reasons for the BCTESG
  • other transactions

The “transaction origin” field in a record indicates why the CESP system generated the record in the transaction processing report. The CESP system generates most of the RT 900, RT 910 and RT 911 in response to promoter transactions and returns a transaction origin of “0” (promoter initiated) for these records. Promoters can use these records to determine the processing status of each submitted transaction.

Promoters may also receive records in their transaction processing reports for other reasons and the transaction origin field for these situations would have a code other than “0” (not “promoter initiated”). These records may also include data required to update RESP notional accounts. For example:

  • A CESP promoter support officer initiates a manual intervention.
  • The CESP system performs an automatic re-adjudication.
  • The CRA reassesses a beneficiary’s eligibility for incentives.
  • The CLB is paid for the current benefit year.

3.1.2. Transaction error report (RT 800)

RT 800 advises that an error is present in a transaction. This includes notice that validation has failed or information submitted is missing, incorrect, or incorrectly formatted. The record is rejected and must be corrected and resubmitted.

RESP promoters are responsible for correcting errors and resubmitting updated transactions to the CESP system.

See Appendix E, Understanding error codes.

3.1.3. Severe error report (RT 850)

RT 850 advises that a record was rejected and must be corrected and resubmitted. Severe errors can occur when:

  • transactions with the same BN and Transaction ID already exist (the most frequent cause of severe errors);
  • the record type is invalid;
  • the BN is not 15 characters long; or
  • the Transaction ID has not been provided.

Once RESP promoters have passed industry testing, their systems are less likely to generate transactions with severe errors.

3.1.4. SIN validation report (RT 920)

RT 920 advises that a beneficiary SIN is not usable, usable or linked. This report is produced after the monthly SIR validation of all beneficiary SINs that are already included in the CESP system. If there are no SIN issues for beneficiaries named in the RESPs administered by a promoter, that promoter will not receive a SIN validation report. See also 4.2 SIN validation reports.

3.1.5. Contract registration report (RT 950)

RT 950 indicates the registration status of contracts. Promoters should not consider a new contract to be “registerable” at the CRA until the CESP system returns a RT 950 for the contract with the “registration status” field set to “1” (registerable). See also 4.1 Transactions required to set up an RESP

3.1.6. Production processing results report

The production processing results report gives a breakdown of all transaction types processed and the error rate for each type. This report is a PDF file sent in English and French.

3.2. Referral report (RT 960)

The Government of Ontario’s birth registration service enables parents of Ontario newborns to:

  • register online the birth of newborn children;
  • request a birth certificate;
  • apply for a SIN; and
  • sign up for federal and provincial child benefits, including the Canada Child Benefit.

This service now includes the ability to request an education savings referral which advances both provincial and federal efforts to encourage and support early and long-term savings for a child’s post-secondary education.

While registering online the birth of a child, parents of Ontario newborns may request to be contacted by a participating RESP promoter of their choice, to learn about and start to open an RESP, and request the CLB and/or the CESG for their child.

When they choose to participate, the parent:

  • consents to having their personal information shared;
  • validates their contact information; and
  • provides their consent to be contacted by the RESP promoter they have chosen.

After confirming the birth registration, ServiceOntario transmits the individual’s referral information to the CESP system, which processes this information and provides it to the selected promoter in a daily referral report (RT 960). Promoters will receive a referral report every day whether or not there are referral report records to send. An empty referral report will contain just the header and trailer records.

3.3. CESP monitoring reports

Depending on monitoring results, some promoters may also receive monitoring reports in Excel format, in addition to the reports described in the ITS. Individual promoters are informed by email when these Excel reports are available for downloading using MSFT.

CESP monitoring
report
Purpose Report
month
Unregistered contracts

See 4.3.1. Unregistered contracts monitoring report
Identifies contracts that may not be deemed “registerable” by the CESP system. November
April
SIN errors

See 4.3.2.
SIN error monitoring report
Identifies financial transactions that were repeatedly rejected (with error codes) because the associated beneficiary is not yet established in the CESP system. April
October
Three year rule

See 4.3.3.
Three year rule monitoring report
Identifies financial transactions that were rejected (with SIN-related error codes) but have not been corrected and are at risk of failing the three year rule in the next four to 10 months. April
October
CLB resubmissions

See 5.6.4.
CLB resubmissions monitoring report
Identifies CLB requests that were refused (not rejected with error codes), but if resubmitted might now be paid because the CRA and/or CESP system records have been updated. January
April
July
October
Monthly monitoring Summarizes errors for promoters with either error rates greater than 10% or an erred contribution amount greater than $750,000 Monthly
(if required)

4. Setting up an RESP

Once the appropriate information has been collected and entered into the RESP promoter’s system, the RESP promoter can submit the required electronic transactions to the CESP system to set up an RESP.

4.1. Transactions required to set up an RESP

The CESP system requires three separate transactions for each ESP to register the contract:

  • Transaction 1: Contract information (100-01)
    This includes information such as the date the contract was opened, the contract number, the specimen plan number, the BN of the financial institution, etc.
    The 100-01 transaction establishes the contract in the CESP system and identifies whether or not the plan is an “individual/sibling only” plan.
  • Transaction 2: Beneficiary information (200-03)
  • Transaction 3: Subscriber information (200-04)

Once all three transactions are processed successfully by the CESP system:

  • the promoter receives a RT 950 in the contract registration report with the “registration status” field set to “1” (registerable); and
  • the CESP system sends a request to the CRA to register the ESP.
4.1.1. Contract information (100-01)

In contract information transactions (100-01), the “individual/sibling only” field (position 103) is the only other field in addition to the first seven mandatory fields for all promoter transactions. This field must be “1” (Yes) for the CESP system to pay the following incentives:

  • Additional CESG
  • CLB
  • SAGES
  • BCTESG
Common problems for 100-01 Resolution
Contract set up incorrectly
  • The “individual/sibling only” field of the
    100-01 transaction should have been Yes (1) but was set up using No (0).
  • When the Additional CESG is requested using a 400-11 transaction, the payment is refused with a refusal reason J in a RT 900.
See refusal reason J in Appendix F – Understanding refusal reasons
Contract set up incorrectly
  • The “individual/sibling only” field of the
    100-01 should have been Yes (1) but was set up using No (0).
  • When one of the following incentives is requested (using the transaction shown) it is rejected with an error code 1010 in a RT 800.
    • Additional CESG (511-12)
    • CLB (400-24)
    • SAGES (410-30)
    • BCTESG (411-40)
See error code 1010 in Appendix E – Understanding error codes
4.1.2. Beneficiary information (200-03)

The following beneficiary information in 200-03 transactions must pass validation at SIR:

  • SIN
  • given name
  • surname
  • date of birth
  • sex

The CESP system does a preliminary validation of 200-03 transactions before sending the beneficiary information for validation at SIR. If it is mathematically impossible for the SIN to be valid, the CESP system rejects the 200-03 transaction and generates a RT 800 with an error code of 7006 (invalid SIN). If the SIN had already been set up for a beneficiary in the CESP system but the birth years do not match, the CESP system rejects the 200-03 transaction and generates a RT 800 with an error code of 7000 (invalid date).

If the beneficiary information in a 200-03 transaction passes SIR validation, the CESP system generates a corresponding RT 900 in the transaction processing report. This informs the promoter that the beneficiary has been set up successfully in the CESP system and financial transactions may be successfully processed for this beneficiary SIN. If the beneficiary information in a 200-03 transaction fails SIR validation, the CESP system generates a corresponding RT 800 in the transaction error report.

The CESP system processes financial transactions for a beneficiary only if the associated 200-03 transaction has been successfully processed and the beneficiary is established in the CESP system. Otherwise, all financial transactions for the corresponding beneficiary SIN will be rejected with a 7001 or a 7031 error code.

On average, 80% of rejected transactions occur because beneficiary information has failed SIR validation. Promoters can reduce error rates by ensuring that beneficiary information is accurate before submitting 200-03 transactions to the CESP system.

As the CESP system processes non-financial transactions before processing financial transactions, promoters can submit their 200-03 transactions in the same file as the associated financial transactions for a beneficiary.

A 200-03 transaction will be rejected with a 7006 error code (invalid SIN) if the SIN is correct but any of the other four “SIN” fields (given name, surname, date of birth or sex) do not pass SIR validation. The CESP system reports SIR validation results in a RT 800 to help promoters resolve rejected 200-03 transactions with this error code. These SIR validation results appear from position 76 to 80 in a RT 800.

RT 800 field name Position SIR validation results
SIN 76 0 – Failed SIR validation
1 – Passed SIR validation
Given name 77 0 – Failed SIR validation
1 – Passed SIR validation
Surname 78 0 – Failed SIR validation
1 – Passed SIR validation
Birth date 79 0 – Failed SIR validation
1 – Exact Match
2 – Failed - Exact year and month matched
3 – Failed - Exact year and day matched
Sex 80 0 – Failed SIR validation
1 – Passed SIR validation

For example, if the beneficiary given name is “Katrina” at SIR but the given name field in the 200-03 transaction reported “Trina”, the CESP system would generate a RT 800 in the transaction error report with:

  • “SIN” as the field name in positions 42 to 71;
  • “7006” as the error code in positions 72 to 75; and
  • “0” in position 77 to indicate the given name failed SIR validation.

The fields for SIR validation results are blank when a beneficiary SIN fails the preliminary validation test by the CESP system.

Common problems for 200-03 Resolution
Any of the five SIN validation fields fail
  • Beneficiary SIN information in a 200-03 transaction does not pass SIR validation. For example:
    • A nickname is used instead of the official first name at SIR (“Bob” instead of “Robert”)
    • First and last names are reversed
    • Day and month are reversed for the date of birth
  • The CESP system rejects the 200-03 transaction with a 7006 error code (Invalid SIN). This also prevents the CESP system from processing financial transactions for that beneficiary
See error code 7006 in Appendix E – Understanding error codes
Other transactions are rejected
  • Other transactions are submitted for a beneficiary that has not yet been established in the CESP system. These transactions are rejected for the affected beneficiary with a 7001 or a 7031 error code in the transaction error report.
See error codes 7001 and 7031 in Appendix E – Understanding error codes
Privacy issues for the custodial parent
  • A beneficiary’s father contacts the CESP call centre to determine the grant room available for a beneficiary. However, the beneficiary’s mother (only) was named in the custodial parent name field (position 411-440) in the 200-03 transaction. The CESP cannot disclose any information to the father for privacy reasons.
The promoter could send another 200-03 transaction to the CESP system with the father’s name in the custodial parent name field.
or
If the promoter’s system allows it, the promoter could merge the father’s and mother’s name into the same custodial parent name field and submit it to the CESP system in a new 200-03 transaction.
One-name beneficiary
  • While not a frequent problem, a beneficiary could have only one name (the first and last name are one and the same). In the past, a request for a manual intervention was needed to allow a beneficiary with only one name to be set up in the CESP system.
The CESP system now allows the given name field to be blank. If the RESP provider’s system will not allow a blank field for the given name, they could enter a period (.),
hyphen (-) or underscore (_).
4.1.3. Subscriber information (200-04)

While the CESP system must determine that it is mathematically possible for the subscriber SIN to be valid, subscriber information is not validated at SIR.

4.2. SIN validation reports (RT 920)

A beneficiary SIN may become unusable for new financial transactions after the beneficiary has been successfully validated and established in the CESP system. This could occur due to:

  • a death of the beneficiary;
  • a cancelled or expired (temporary 900 series) SIN; or
  • a SIN that was used fraudulently.

Each month, the CESP system re-validates the SINs of all beneficiaries previously established in the CESP system. Beneficiaries flagged by SIR are identified using the following SIN issues in a SIN validation report:

  1. SIN is not usable
  2. SIN is usable
  3. Linked SIN

1 – SIN is not usable: A beneficiary will cease to receive incentive payments in an RESP until the promoter corrects the problem by resubmitting a 200-03 transaction for the beneficiary with usable SIN information. While contributions made for the beneficiary could still attract the CESG prior to the SIN being flagged at SIR, contributions made after this date would receive a RT 900 with a refusal reason N (SIN has been flagged by SIR) in the transaction processing report.

2 – SIN is usable: SIR has removed a non-usable flag for a beneficiary SIN already reported in a previous RT 920 in the SIN validation report. For example, this could occur if SIR temporarily froze a SIN and made it usable again at a later date.

3 – Linked SIN: This happens when a beneficiary receives a new SIN to replace a previous SIN. The old SIN is linked to a new SIN. For example, an expired (temporary 900 series) SIN is linked to the new permanent SIN. All financial transactions submitted for the old SIN are rejected using a RT 800 with a 7001 error code (invalid value) in the transaction error report.

4.3. Monitoring reports related to setting up an RESP

Three monitoring reports are related to issues that promoters often encounter while setting up an RESP:

  • Unregistered contracts monitoring report
  • SIN error monitoring report
  • Three year rule monitoring report

The CESP system informs individual promoters by email when these reports are available for downloading using MSFT.

4.3.1. Unregistered contracts monitoring report

Legislation prohibits paying incentives into non-registered plans and promoters are responsible for ensuring that contracts reach registerable status within timelines outlined in the CRA Information Circular IC93-3R2:

“The effective date of registration of an ESP will be the date the plan was opened if all required plan information is sent electronically to the CESP system no later than 60 days after the end of the calendar year the plan was opened.”

In addition to the contract registration report (RT 950), promoters can also use the unregistered contracts monitoring report to help them resolve contract registration issues. These reports are created in November and April.

Unregistered contracts are sent to the CRA in October of the year after the contract was opened which could lead to the following consequences:

  • tax implications for subscribers
  • loss of incentive payments for beneficiaries

The unregistered contracts monitoring reports are generated for financial transactions that may have received incentive payments. Separate reports in Excel format are sent to address two scenarios:

  • transaction 100-01 successfully processed
  • transaction 100-01 missing or rejected

Transaction 100-01 successfully processed: This Excel report addresses unregistered contracts for which a contract information transaction (100-01) has been successfully processed but the following issues remain:

  • transaction 200-03 is missing or was rejected
  • transaction 200-04 is missing or was rejected
  • transactions 200-03 and 200-04 are both missing or were rejected

The Excel report contains the following columns for each unregistered contract ID:

  • reporting period
  • specimen plan ID
  • contract ID
  • RT 100 transaction ID
  • RT 100 transaction Date
  • reason for registration failure

Transaction 100-01 missing or rejected: This Excel report addresses unregistered contracts for which a contract information transaction (100-01) was either rejected or never submitted. The Excel report contains the following columns for each unregistered contract ID:

  • specimen plan ID
  • contact ID
  • reason for registration failure

If the transaction 100-01 is missing or was rejected, the contract will not be included in the monthly contract registration report (RT 950). The specimen plan ID and the contract ID provided in the corresponding unregistered contracts monitoring report are obtained from successfully processed financial transactions that refer to the contract ID.

4.3.2. SIN error monitoring report

SIN error monitoring reports are generated in April and October to inform promoters about financial transactions that were repeatedly rejected (with error codes) in the past six months because the 200-03 transaction was rejected for the associated beneficiary.

If the associated 200-03 transaction was rejected with an error code 7006 (invalid SIN), the SIR validation results are also indicated in this report. This report is an Excel spreadsheet containing the following data for rejected financial transactions:

  • beneficiary SIN
  • contract ID
  • specimen plan ID
  • error code
  • SIR validation results
    • SIN
    • given name
    • surname
    • birthdate
    • sex
4.3.3. Three year rule monitoring report

An incentive will not be paid if the transaction date for the corresponding financial record is more than three years before the date on which the promoter sends the transaction file to the CESP system. The sent date is recorded in the header record (RT 001) of the submitted file. Promoters must resolve errors and resubmit accurate financial transactions within the three year limit for incentives to be paid.

The three year rule monitoring reports are created in April and October to advise promoters about financial transactions that were rejected (with SIN-related error codes) and may be at risk of failing the three year rule in the next four to ten months. This report is an Excel spreadsheet containing the following data for each rejected financial transaction:

  • beneficiary SIN
  • specimen plan ID
  • transaction type
  • contract ID
  • transaction date
  • beneficiary error
    • SIN
    • given name
    • surname
    • birthdate
    • sex

The latest SIR flags are provided only when the beneficiary error code is 7006 (invalid SIN). Otherwise, these fields will be blank.

Many financial transactions are rejected because the associated beneficiary has not yet been established in the CESP system. Promoters must have successfully processed a beneficiary information transaction (200-03) for each beneficiary listed in this report before any incentives can be paid for the financial transactions of these beneficiaries.

5. Processing other RESP transactions

Once information about the contract, the subscriber, and the beneficiary has been set up accurately in the CESP system, all other promoter transactions for that beneficiary can be processed by the CESP system.

5.1. Logical processing sequence

Records in each promoter file can be in any order because the CESP system processes transactions in a logical sequence each month. As non-financial transactions are processed before financial transactions, promoters can submit both types of transactions in the same file. However, financial transactions can be processed only after the associated beneficiary has been successfully established in the CESP system.

5.1.1. Order of incentive payments

The CESP system pays incentives in the same order in which incentive requests are successfully processed, using a “1st come, 1st served” approach. If the CESP system processes multiple incentive requests for the same beneficiary in the same processing month, the transaction with the earliest transaction date is processed first, and will receive the incentive payment first.

5.2. Fields used for each RT 400 transaction type

Not all fields are used for each RT 400 transaction type. However, if a field is not used, it must contain “filler” characters that satisfy ITS format specifications for the field. ITS Appendix D identifies the fields used for each RT 400 transaction type.

5.3. Correcting transactions already processed by the CESP system

Promoters are responsible for reporting accurate information to the CESP system. If it is determined that inaccurate information has been successfully processed by the CESP system, the promoter must take appropriate action to correct these inaccuracies. The required process depends on the transaction that must be corrected.

5.3.1. Contract, beneficiary and subscriber information

Promoters can submit new transactions for the contract (100-01), the beneficiary (200-03) and the subscriber (200-04) to correct these transactions if they have already been processed by the CESP system with inaccurate information.

5.3.2. RT 400 transactions

If it is determined that an inaccurate RT 400 transaction has been processed by the CESP system, the promoter must reverse this transaction and submit another transaction with the correct information. Reversals are permitted only to correct administrative errors on RT 400 transactions.

For example, a promoter might determine that a $1,000 contribution was processed by the CESP system with an inaccurate amount of $100. The promoter must reverse the original transaction ($100) and submit a new transaction with the correct contribution amount ($1,000).

Promoters can reverse an inaccurate RT 400 transaction by submitting a new transaction with the following key information:

Field in new transaction Position Field Value
Reversal flag 121 2 = Reversal
Original promoter transaction ID 122-136 Matches transaction to reverse
Original promoter BN 137-151 Matches transaction to reverse

The transaction that is submitted to reverse another transaction must have a new (unique) promoter transaction ID (position 12-26).

The original promoter BN can be the business number of another promoter only if that promoter was merged with or acquired by the current promoter. In these situations, promoters must pass industry testing to demonstrate that their systems are able to reverse transactions that were submitted by the original promoter.

5.3.3. Requests for the BCTESG (411-41)

If the CESP system successfully processed a request for the BCTESG that had an administrative error (e.g. wrong beneficiary) the promoter must submit a cancel BCTESG request transaction (411-41) to the CESP system. This reverses the original request and the promoter could then submit a corrected BCTESG request transaction (4011-40) if required.

5.3.4. Requests for the SAGES (410-31)

If the CESP system successfully processed a request for the SAGES that had an administrative error (e.g. wrong transaction date) the promoter must submit a cancel SAGES request transaction (410-31) to the CESP system. This reverses the original request and the promoter could then submit a corrected SAGES request transaction (410-30) if required.

Reversing a contribution transaction (400-11) associated with a SAGES request automatically reverses the SAGES request.

5.4. Contributions and requests for the CESG (400-11)

5.4.1. Key fields for 400-11

Promoters can request the CESG with a contribution transaction (400-11) using the following key fields:

Key 400-11 fields Position Notes
Beneficiary SIN 78-86 The beneficiary SIN must exist in the CESP system. See error code 7001 in Appendix E – Understanding error codes
Contribution amount 87-95 Promoters cannot assume this amount is an “assisted contribution”. See the assisted contribution amount field
(positions 165-173) in the RT 900.
Grant requested 96 The CESP system will not pay the CESG on a contribution unless this field is “1” (Yes).
PCG/spouse 229-243 The Additional CESG will not be paid for a contribution unless these fields are successfully validated with the CRA. The promoter must also be authorized to submit the Additional CESG transactions. See error code 1014 in Appendix E – Understanding error codes.
PCG/spouse given name 244-263
PCG/spouse surname 264-283
PCG/spouse type 284
5.4.2. Key RT 900 fields for 400-11

The CESP system acknowledges successfully processed 400-11 transactions with a RT 900 in the transaction processing report. The following are RT 900 fields of interest for 400-11 transactions.

Key RT 900 fields for
400-11
Position Notes
Grant amount 26-36 Indicates the Basic CESG amount paid for the corresponding contribution
Promoter transaction ID 52-66 Identifies the associated contribution transaction (400-11)
Refusal reason 67 Provides a refusal reason if the full amount of Basic CESG was not paid
Transaction origin 68 See 5.4.3: Transaction origins for the CESG
Additional CES grant amount 136-144 Indicates the Additional CESG amount paid for the corresponding contribution
Assisted contribution amount 165-173 Indicates the amount of contribution that attracted the CESG
Additional CES grant refusal reason 174 Provides a refusal reason if the full amount of the Additional CESG was not paid

If the grant requested field for a 400-11 transaction is “1” (Yes), the CESP system will validate eligibility and pay the corresponding CESG amount. The amounts of Basic CESG and Additional CESG paid for a contribution are reported back to promoters separately in different fields of the same RT 900. While promoters must have one notional account to track the total amount of Basic CESG and Additional CESG combined for all beneficiaries in an RESP, promoters may also maintain these accounts at the beneficiary level.

The CESP system informs promoters how much of each contribution attracted the CESG (assisted contributions) in a RT 900 of the transaction processing report and this amount must be updated in the assisted contribution notional account. If applicable, promoters must calculate the remaining contribution amount (unassisted contribution) to update the unassisted contribution notional account. While each contribution must be made in respect of one beneficiary, notional accounts for the assisted contributions and unassisted contributions must be maintained at the plan level.

The notional account balance for assisted contributions and unassisted contributions must be maintained by the promoter. In the event of a transfer, both of these notional account balances must be recorded on the RESP transfer form. The assisted contribution notional account balance is also used to calculate the amount of CESG that must be repaid due to a withdrawal of contributions.

5.4.3. Transaction origins for the CESG

0 – Promoter initiated: If the CESP system processes a contribution transaction (400-11), the promoter receives a RT 900 in the transaction processing report to acknowledge the successful processing of this transaction. The transaction origin code (position 68) will indicate that the RT 900 was promoter initiated (transaction origin = 0).

Other transaction origins: A promoter may also receive a RT 900 in the transaction processing report for other reasons. These records may also indicate that the CESG balance must be updated for the RESP. The table below explains how to interpret the various transaction origin codes (position 68) for these records.

Code Explanation
1 Re-Adjudication: For example, a request for the CESG that was initially refused due to the CESG annual limit may subsequently receive the corresponding CESG payment when a promoter reverses other transactions for the same beneficiary.
2 CESP initiated: A CESP promoter support officer can perform a manual intervention that has an impact on the CESG account balance in an RESP.
4 Re-Adjudication due to CRA reassessment: A beneficiary’s eligibility for the Additional CESG may change after a CRA reassessment, which could change the amount of Additional CESG paid for contributions.
5.4.4. Beneficiary matching report for refusal reason 4

Promoters offering the Additional CESG may receive a beneficiary matching report for refusal reason 4 with the other monthly reports generated by the CESP system. These reports include a record for each request that did not receive the Additional CESG due to refusal reason 4.

The beneficiary matching report is an Excel spreadsheet with the following columns for each record:

  • Year of the request
  • Beneficiary SIN
  • Contract ID
  • Beneficiary surname status
  • Beneficiary given name status
  • Beneficiary birth date status
  • PCG/spouse SIN (for individual PCGs)
  • PCG BN (for public PCGs)

For more information see Appendix F – Understanding Refusal Reasons

5.4.5. Common problems for 400-11
Common problems for 400-11 Resolution
Beneficiary not established in the system
  • The beneficiary for whom a contribution
    (400-11) was made has not yet been set up successfully in the CESP system. The contribution transaction is rejected with an error code 7001 or 7031 in a RT 800.
See error codes 7001 and 7031 in Appendix E – Understanding error codes
Contract not set up correctly
  • The “Individual/sibling only” field of the
    100-01 transaction should have been Yes (1) but was set up using No (0).
  • Additional CESG is requested using a 400-11 transaction but payment is refused with a refusal reason J in a RT 900.
See refusal reason J in Appendix F – Understanding refusal reasons

Prior to 2018, only the PCG could provide their name and SIN to request the Additional CESG. If the PCG’s cohabiting spouse or common law partner provided their name and SIN as the PCG instead, a request for the Additional CESG would be processed with a refusal reason “L”. In those situations, the RESP promoter would have had to contact the subscriber and collect the PCG’s information on a new application form and then either submit a 511-12 transaction to provide the updated PCG information, or reverse and resubmit the original 400-11 transaction with the updated PCG information.

As of 2018, either the PCG or their cohabiting spouse or common-law partner, if applicable, can provide their information on the application form to request the Additional CESG. The RESP promoter can submit this PCG/spouse information to the CESP system and not receive a refusal reason “L” if this information matches the CRA records.

5.5. PCG/spouse information (511-12)

In the ITS, the term “PCG/spouse” could refer to:

  • the beneficiary’s PCG;
  • the PCG’s cohabiting spouse; or
  • the PCG’s common-law partner.

The 511-12 transaction may be used to provide new or updated PCG/spouse information on a contribution transaction (400-11) that has already been processed by the CESP system but has not attracted the Additional CESG because:

  • no PCG/spouse information was provided in the original contribution transaction; or
  • inaccurate PCG/spouse information was provided in the original contribution transaction.

Promoters must pass specific industry testing before submitting 511-12 transactions to the CESP system.

Promoters must submit a separate 511-12 transaction for each corresponding 400-11 transaction.

5.5.1. Key fields for 511-12

The following are key fields for 511-12 transactions:

Key 511-12 fields Position Notes
Transaction date 4-11 Must be on or after the 400-11 transaction date. See error codes 5032, 5033 and 7039 in Appendix E, Understanding error codes.
Contribution promoter transaction ID 69-83 Transaction ID of the 400-11 transaction for which the Additional CESG is being requested. The transaction will be rejected if the corresponding 400-11 transaction is not currently processed or did not request grant. See error codes: 5025, 5026, 5027 and 5030 in Appendix E, Understanding error codes.
Contribution
promoter BN
84-98 Promoter BN submitted in the 400-11 transaction for which the Additional CESG is being requested.
PCG/spouse 99-113 These fields must be successfully validated with the CRA before the CESP system will pay the Additional CESG for the specified contribution.
PCG/spouse given Name 114-133
PCG/spouse surname 134-153
PCG/spouse type 154
5.5.2. Key RT 900 fields for 511-12

Each processed 511-12 transaction generates one RT 900 with a transaction origin of 0 and two RT 900 with a transaction origin of 8 in the transaction processing report. The following are RT 900 fields of interest for 511-12 transactions.

Key RT 900 fields for 511-12 Position Notes
Promoter transaction ID 52-66 Identifies the associated PCG/spouse transaction
Transaction origin 68 Indicates why the RT 900 was generated in the transaction processing report
Additional CES grant amount 136-144 Indicates the Additional CESG amount paid for the associated contribution
Additional CES grant refusal reason 174 Provides a refusal reason if the full amount of the Additional CESG was not paid
5.5.3. Alternative to using 511-12

Promoters are not required to use the 511-12 transaction to request the corresponding Additional CESG, if a contribution transaction has been successfully processed with either missing or inaccurate PCG/spouse information. Promoters may choose instead to reverse the original 400-11 transaction and resubmit a new 400-11 transaction with the required PCG/spouse information.

5.5.4. Common problems for 511-12
Common problems for 511-12 Resolution
Three-year rule
  • A 511-12 transaction is sent to the CESP system for processing more than 3 years after the corresponding contribution transaction (400-11) date. For example:
    • 400-11: Transaction date = 20100412
    • 511-12: File sent date = 20130704
  • The 511-12 transaction is rejected with an error code 5033 in a RT 800.
See error code 5033 in Appendix E – Understanding error codes
Previous 511-12 with the same transaction date
  • A 511-12 transaction was submitted for a particular contribution but the Additional CESG was refused with a refusal reason in a RT 900. The promoter contacted the subscriber for the correct PCG/spouse information and resubmitted another 511-12 transaction for the same contribution, using the same transaction date as the previous 511-12. The second 511-12 transaction is rejected with an error code 5032 in a RT 800.
See error code 5032 in Appendix E – Understanding error codes

Prior to 2018, only the PCG could provide their name and SIN to request the Additional CESG. If the PCG’s cohabiting spouse or common law partner provided their name and SIN as the PCG instead, a request for the Additional CESG would be processed with a refusal reason “L”. In those situations, the RESP promoter would have had to contact the subscriber and collect the PCG’s information on a new application form and then either submit a 511-12 transaction to provide the updated PCG information, or reverse and resubmit the original 400-11 transaction with the updated PCG information.

As of 2018, either the PCG or their cohabiting spouse or common-law partner, if applicable, can provide their information on the application form to request the Additional CESG. The RESP promoter can submit this PCG/spouse information to the CESP system and not receive a refusal reason “L” if this information matches the CRA records.

5.6. Request for CLB payments (400-24)

Only one RESP can be active at any given time for new CLB payments made in respect of a beneficiary.

When a subscriber completes the CLB application form, the promoter must submit a single CLB request transaction (400-24) to the CESP system to receive the accumulated CLB entitlement (if applicable) for this beneficiary. This transaction also makes the RESP active for future CLB installments of this beneficiary.

The CESP system automatically pays CLB installments for each new benefit year to the active RESP of an eligible beneficiary. No additional CLB requests are required for the beneficiary.

If a terminated RESP is currently active for CLB payments, promoters should immediately stop all future CLB payments in the RESP by submitting a CLB request transaction (400-24) with the grant requested field set to “0” (No). Promoters should send separate transactions for each beneficiary with an active CLB request in the RESP.

An RESP may also become inactive for future CLB payments of a particular beneficiary after one of the following events:

  • The CESP system receives a more recent 400-24 transaction for the beneficiary in another RESP, with the grant requested field set to “1” (Yes).
  • The CESP system receives a grant repayment transaction (400-21) for the beneficiary with a repayment reason of “03” (contract termination), the CLB amount repaid is greater than zero and the transaction date is more recent than the latest CLB request for that RESP.
5.6.1. Key fields for 400-24

The following are key fields for 400-24 transactions:

Key fields for 400-24 Position Notes
Beneficiary SIN 78-86 The beneficiary SIN must exist in the CESP system. See error code 7001 and 7031 in Appendix E, Understanding error codes.
Grant requested 96 Makes the RESP either active or inactive for the CLB payments of this beneficiary. A value of “1” (Yes) makes it active, whereas a value of “0” (No) makes it inactive.
PCG/spouse 229-243 These fields must be successfully validated with the CRA before the CESP system will pay the CLB for the beneficiary. The promoter must also be authorized to submit CLB transactions. See error code 1012 in Appendix E, Understanding error codes.
PCG/spouse given name 244-263
PCG/spouse surname 264-283
PCG/spouse type 284

When terminating an RESP, promoters should submit a 400-24 transaction, for each beneficiary with an active CLB request in the RESP, and set the grant requested field to “0” (No). While this will stop new CLB payments to this RESP, it will not prevent beneficiaries from receiving the CLB payments in another RESP.

5.6.2. Key RT 900 fields for 400-24

The CESP system acknowledges successfully processed 400-24 transactions with a RT 900 in the transaction processing report. The following are RT 900 fields of interest for 400-24 transactions:

Key RT 900 fields for 400-24 Position Notes
Promoter transaction ID 52-66 Identifies the associated CLB request transaction (400-24)
Refusal reason 67 Provides a refusal reason if the full amount of CLB was not paid
Transaction origin 68 See 5.6.3 Transaction origins for the CLB
CLB amount 127-135 Indicates the CLB amount paid
5.6.3. Transaction origins for the CLB

0 – Promoter initiated: The CLB is paid in response to a CLB request if there is an accumulated CLB entitlement for the beneficiary at that time. The promoter receives a RT 900 in the transaction processing report to acknowledge the successful processing of a CLB request and the transaction origin code (position 68) would indicate that the RT 900 was promoter initiated (transaction origin = 0).

Other transaction origins: A promoter may also receive a RT 900 in the transaction processing report for other reasons and this could indicate that the CLB balance must be updated for the beneficiary. The following table explains how to interpret the various transaction origin codes (position 68) for these other records.

Code Explanation
1 Re-Adjudication: For example, a request for the CLB that was initially refused due to the annual limit may subsequently receive the corresponding CLB payment when a promoter reverses other transactions for the same beneficiary.
2 CESP initiated: A CESP promoter support officer can perform a manual intervention that will have an impact on the CLB account balance for a beneficiary.
4 Re-Adjudication due to CRA reassessment: A beneficiary’s eligibility for the CLB may change when the CRA performs a reassessment of the adjusted income for the beneficiary’s PCG.
6 CLB installment for new benefit year: Promoters submit only one request for the CLB per beneficiary. If a beneficiary is eligible for CLB in a subsequent year, the CESP system will automatically pay the CLB amount for the beneficiary that year.
7 Payment of CLB entitlement: For example, CLB payments for a beneficiary might be repaid from a terminated RESP. If there is another RESP that is active for the CLB payments of the same beneficiary, the entire repaid CLB amount would be paid to that RESP.
9 Inactive CLB request: An RESP that was originally active for the CLB payments of a beneficiary would become inactive if a promoter submitted a more recent CLB request for the same beneficiary in another RESP.
5.6.4. CLB resubmissions monitoring report

The CESP system will refuse payment for a CLB request transaction (400-24) when the PCG or the PCG’s spouse or common-law partner information does not match beneficiary information during the CRA validation process. This occurs most frequently when the beneficiary’s information does not match the CRA records, or when the CRA record does not yet exist when the beneficiary matching validation takes place.

Quarterly CLB resubmission monitoring reports inform promoters about CLB requests that were originally refused, but may now pass the CRA validation using the same information for the beneficiary and the PCG or the PCG’s cohabiting spouse or common-law partner. This report is an excel spreadsheet with the following columns for each report record:

  • Beneficiary SIN
  • Contract ID
5.6.5. Common problems for 400-24
Common problems for 400-24 Resolution
Beneficiary not established in the system
  • The beneficiary for whom the CLB was requested has not yet been successfully set up in the CESP system. The CLB request (400-24) transaction is rejected with an error code 7001 or 7031 in a RT 800.
See error code 7001 or 7031 in Appendix E – Understanding error codes
Contract not set up correctly
  • The “Individual/Sibling Only” field of the
    100-01 transaction should have been Yes (1) but was set up using No (0).
  • CLB is requested for the beneficiary using a 400-24 transaction but payment is rejected with an error code 1010 in a RT 800.
See error code 1010 in Appendix E – Understanding error codes

Prior to 2018, only the PCG could provide their name and SIN to request the CLB. If the PCG’s cohabiting spouse or common law partner provided their name and SIN as the PCG instead, a request for the CLB would be processed with a refusal reason “L”. In those situations, the RESP promoter would have had to contact the subscriber and collect the PCG’s information on a new application form and submit a new 400-24 transaction to provide the updated PCG information.

As of 2018, either the PCG or their cohabiting spouse or common-law partner, if applicable, can provide their information on the application form to request the CLB. The RESP promoter can submit this PCG/spouse information to the CESP system and not receive a refusal reason “L” if this information matches the CRA records.

5.7. SAGES (410-30 and 410-31)

There are two types of SAGES transactions which are categorized by the transaction type (30 or 31) specified in the SAGES transaction (RT 410):

  • 410-30 = SAGES request
  • 410-31 = Cancel SAGES request

Both of these transactions refer to a processed contribution transaction (400-11) using the promoter transaction ID and the promoter ID of the corresponding contribution transaction.

SAGES request: A separate SAGES request transaction (410-30) must be sent for each contribution transaction (400-11) to attract the SAGES payment for that contribution.

Cancel SAGES request: The cancel SAGES request transaction (410-31) must be used only to correct an administrative error (e.g. wrong transaction date). Unlike a SAGES repayment transaction (400-21), when a promoter cancels a SAGES request, the CESP system restores the cancelled SAGES amount to the beneficiary’s SAGES grant room.

A cancel SAGES request transaction (410-31) cancels the request for SAGES payment on a specific contribution transaction (400-11). It does not reverse the original contribution transaction. However, reversing a contribution transaction automatically cancels a SAGES request that was processed for that contribution.

5.7.1. Key fields for RT 410

The following are key fields for SAGES transactions (RT 410):

Key fields for RT 410 Position Notes
Transaction date 4-11 Used to validate refusal reasons for SAGES requests:
  • O = Late SAGES request
  • D = Late transaction
  • 9 = Other
Transaction type 42-43 Determines the type of SAGES transaction:
  • 30 = SAGES request
  • 31 = Cancel SAGES request
Contribution promoter transaction ID 69-83 Transaction ID of the 400-11 transaction for which the SAGES is being requested or cancelled
Contribution promoter BN 84-98 Promoter BN submitted in the 400-11 transaction for which the SAGES is being requested or cancelled

Promoters must use the most recent of the following dates to determine the transaction date of a SAGES request transaction:

  • the date that the subscriber completes a SAGES application form; or
  • the date that the subscriber makes the corresponding contribution

For example, a subscriber began making contributions to an individual RESP on October 14, 2013, but did not complete a SAGES application form for the beneficiary until February 11, 2014. All SAGES requests for contributions that were made before completing the application form must have a transaction date of February 11, 2014. Any SAGES request for contributions made after that date must have the same transaction date as the contribution transaction.

5.7.2. Key RT 910 fields for RT 410

The CESP system will acknowledge each successfully processed SAGES request transaction (410-30) and cancel SAGES request transaction (410-31) by sending promoters a corresponding RT 910 in their monthly transaction processing report.

A RT 910 will also be generated in the transaction processing report in response to other transactions if they have an impact on the SAGES notional account balance in an RESP.

For example, the CESP system will send one RT 900 and one RT 910 in the transaction processing report for the same financial transaction (RT 400) if:

  • the SAGES EAP amount or the SAGES amount is greater than zero; or
  • the contribution transaction (400-11) for which a SAGES amount was paid is reversed.

The following RT 910 fields are of interest for SAGES transactions:

Key RT 910 fields for RT 410 Position Notes
SAGES amount 4-14 Amount by which the SAGES account balance changed due to the successful processing of the associated transaction
Refusal reason 45 Provides the refusal reason if the full amount of SAGES was not paid
Transaction origin 46 See 5.7.4. Transaction origins for the SAGES
Contract ID 72-86 Identifies the contract ID for which a manual intervention was performed by a CESP promoter support officer (CESP initiated)
CESP program transaction date 87-94 Identifies the date on which a manual intervention was performed by a CESP promoter support officer (CESP initiated)
SIN 95-103 Identifies the beneficiary SIN for which a manual intervention was performed by a CESP promoter support officer (CESP initiated)
5.7.3. SAGES suspension period

On March 22, 2017, the Government of Saskatchewan announced in their provincial budget that the SAGES will be suspended as of January 1, 2018, and until further notice. Promoters may decide to continue accepting and processing SAGES applications after January 1, 2018. However, no SAGES will be paid during the suspension period.

Additional information pertaining to the suspension of the SAGES is available on the Canada.ca/RESPresources Web page in the following information bulletins:

Information bulletins Date
No 711 March 23, 2017
No 722 June 12, 2017
No 735 September 20, 2017
No 740 November 8, 2017
5.7.4. Transaction origins for the SAGES

0 – Promoter initiated: If the SAGES is paid in response to a transaction 410-30 the promoter receives a RT 910 in the transaction processing report to acknowledge the successful processing of that request. The transaction origin code (position 46) would indicate the record was in response to a promoter initiated transaction (transaction origin = 0).

Other transaction origins: A promoter may also receive other records pertaining to the SAGES in the transaction processing report. Some of these records may indicate that the SAGES balance must be updated for the RESP.

The table below explains how to interpret the various transaction origin codes (position 68) in these other records:

Code Explanation
1 Re-adjudication: For example, a request for the SAGES that was initially refused due to the annual SAGES limit may subsequently receive the corresponding SAGES amount when a promoter reverses other transactions for the same beneficiary.
2 CESP initiated: A CESP promoter support officer can perform a manual intervention that will have an impact on the SAGES account balance in the RESP.
A Contribution reversal: Promoters must update the SAGES account in an RESP when they reverse a contribution for which a SAGES amount has been paid.
B New SAGES request: If a promoter submits multiple SAGES requests for the same contribution, the CESP system will pay the SAGES on the most recent SAGES request processed for a particular contribution. The promoter must adjust the SAGES account such that only the last SAGES payment is added to the SAGES account balance. Any other SAGES payments for the same contribution should be subtracted from the SAGES account balance.
5.7.5. SAGES time constraints

Before the SAGES suspension period

  • Refusal reason O (late SAGES request): Prior to the SAGES suspension period, subscribers had three years to apply for the SAGES after making an eligible RESP contribution. The CESP system sent promoters a refusal reason “O” if a SAGES request transaction date was more than three years after the transaction date of the contribution and the request was submitted to the CESP system by 5 pm Eastern Time on January 5, 2018.
  • Refusal reason D (late transaction): Prior to the suspension period, promoters had three years to successfully process a SAGES request transaction which meant they had to send a file to the CESP system for processing no more than three years after the transaction date of the SAGES request in the file. The CESP system sent promoters a refusal reason “D” for SAGES requests processed after this three-year limit.

During the SAGES suspension period

  • Refusal reason 9 (other): SAGES requests submitted to the CESP system during the suspension period will receive a refusal reason “9” (other) if the request is not for a contribution that previously had a successfully processed SAGES request.
  • Error code 7001 (invalid value): During the suspension period, SAGES requests for contributions that previously had a successfully processed SAGES request will be rejected with an error code 7001. This will prevent eligible SAGES amounts already received in an RESP from being reclaimed by ESDC.
5.7.6. Common problems for SAGES transactions
Common problems for SAGES transactions Resolution
Beneficiary not established in the system
  • The beneficiary for whom a contribution transaction (400-11) was made has not yet been successfully set up in the CESP system when a SAGES request transaction (410-30) is submitted for the contribution. The contribution transaction is rejected with an error code 7001 or 7031 in a RT 800 and the SAGES request transaction is rejected with an error code 5026 in another RT 800.
See error codes 7001, 7031 and 5026 in Appendix E –
Understanding error codes
Contract not set up correctly
  • The “Individual/Sibling Only” field of the 100-01 transaction should have been Yes (1) but was set up using No (0).
  • The SAGES is requested for the contribution using a 410-30 transaction but the request is rejected with an error code 1010 in a RT 800.
See error code 1010 in Appendix E – Understanding error codes  
SAGES suspension
  • A promoter submits a SAGES request (410-30) during the SAGES suspension period:
    • The SAGES request is processed but the SAGES payment is refused with a refusal reason 9 in a RT 910.
    • The SAGES requests for contributions that previously had a successfully processed SAGES request will be rejected with an error code 7001 in a RT 800.
  • During the suspension period, when a SAGES request is submitted, regardless of the transaction date, the transaction will either be refused or rejected for the duration of the suspension period.
See refusal reason 9 in Appendix F – Understanding refusal reasons

See error code 7001 in Appendix E – Understanding error codes

During the suspension period, ESDC will process manual interventions to facilitate the correction of administrative errors. However, these will be limited to the amount of SAGES already paid into an RESP before the suspension. No new SAGES payments will be made during the period of suspension.
5.8. BCTESG (411-40 and 411-41)

There are two types of BCTESG transactions which are categorized by the transaction type (40 or 41) specified in the BCTESG transaction (RT 411):

  • 411-40 = BCTESG request
  • 411-41 = cancel BCTESG request

BCTESG request: The 411-40 transaction requests the BCTESG for a specific beneficiary. The one-time $1,200 BCTESG entitlement for a particular beneficiary can only be paid into a single RESP. If multiple BCTESG requests are made for the same beneficiary in different RESPs, the CESP system will pay the full $1,200 BCTESG amount for the first successfully processed request (first-come first-served approach). Subsequent requests for the same beneficiary would receive refusal reason E (lifetime limit exceeded).

Cancel BCTESG request: The 411-41 transaction cancels a BCTESG request already made for a specific beneficiary. Unlike repayments of the BCTESG (using a repayment transaction 400-21) cancelling a BCTESG request (411-41) will restore the beneficiary’s original entitlement to the $1,200 BCTESG amount. The 411-41 transaction must only be used to correct administrative errors (e.g. when a BCTESG request was submitted for the wrong beneficiary).

BCTESG repayment: When the BCTESG is repaid using the repayment transaction (400-21), the beneficiary entitlement is not restored and the repaid amount cannot be paid again into an RESP of the affected beneficiary.

5.8.1. Key fields for 411-40 (BCTESG request)

The following are key fields for BCTESG request transactions:

Key fields for 411-40 Position Notes
Transaction date 4-11 Used to validate refusal reasons:
  • 3 = Age of beneficiary
  • D = Late transaction
Used to validate error code 7041
Beneficiary SIN 69-77 Used to validate eligibility for the BCTESG

Transaction date: Promoters must use the date on the BCTESG application form for the transaction date in BCTESG request transactions (411-40). This is a key date to validate both refusal reasons and error codes.

5.8.2. Key fields for 411-41 (Cancel BCTESG request)

The following are key fields for cancel BCTESG request transactions:

Key fields for 411-41 Position Notes
Original promoter transaction ID 69-83 Identifies the promoter transaction ID associated with the original BCTESG request.
Original promoter BN 84-98 The promoter BN associated with the original BCTESG request.
5.8.3. BCTESG time constraints

Refusal reason 3 (age of beneficiary): Subscribers have three years to apply for the BCTESG once the beneficiary reaches a certain age. The CESP system will send promoters a refusal reason 3 (age of beneficiary) for each request that falls outside the corresponding three-year application window specified in the table below. The transaction date for a BCTESG request is the date on which the subscriber signs the BCTESG application form.

Birth date First day to apply Last day to apply
2006 August 15, 2016 August 14, 2019
2007 August 15, 2015 August 14, 2018
2008
2009
up to August 14
On August 15, 2009
or later
The day the beneficiary turns 6 The day before the beneficiary turns 9

Error code 7042: All BCTESG requests for beneficiaries born before January 1, 2006, will be rejected with error code 7042.

Error code 7041: All BCTESG requests with transaction dates prior to August 15, 2015, will be rejected with error code 7041.

Refusal reason D: As promoters have three years to successfully process a BCTESG request transaction, they must send a file to the CESP system for processing no more than three years after the transaction date of the BCTESG request in the file. The CESP system sends promoters a refusal reason D (late transaction) for BCTESG requests processed after this three-year limit.

5.8.4. Key RT 911 fields for RT 411

The CESP system will acknowledge each successfully processed BCTESG request transaction (411-40) and each cancel BCTESG request transaction (411-41) by sending promoters a corresponding RT 911 in their monthly transaction processing report.

Records will also be generated in response to other transactions if they have an impact on the BCTESG account balance in an RESP. For example, the CESP system sends one RT 900 and one RT 911 together for the same financial transaction (RT 400) when the BCTESG EAP amount or the BCTESG amount is greater than zero.

The following RT 911 fields are of interest for BCTESG transactions:

Key RT 911 fields for
RT 411
Position Notes
BCTESG amount 4-14 Amount by which the BCTESG account balance changed due to the successful processing of a transaction
Promoter transaction ID 30-44 Identifies the associated transaction
Refusal reason 45 Provides the refusal reason if the BCTESG was not paid
Transaction origin 46 0 – Promoter initiated
2 – CESP initiated
5 – Linked SIN
Contract ID 72-86 Identifies the contract ID for which a manual intervention was performed by a CESP promoter support officer (CESP initiated)
CES Program transaction date 87-94 Identifies the date on which a manual intervention was performed by a CESP promoter support officer (CESP initiated)
SIN 95-103 Identifies the beneficiary SIN for whom a manual intervention was performed by a CESP promoter support officer (CESP initiated)
5.8.5. Common problems for BCTESG transactions
Common problems for BCTESG transactions (RT 411) Resolution
Beneficiary not established in the system
  • The beneficiary for whom a BCTESG request (411-40) was made has not been successfully set up in the CESP system. The BCTESG request transaction is rejected with an error code 7001 or 7031 in a RT 800.
See error codes 7001 and 7031 in Appendix E –
Understanding error codes
Contract not set up correctly
  • The “individual/sibling only” field of the 100-01 transaction should have been Yes (1) but was set up using No (0).
  • The BCTESG is requested using a 411-40 transaction, but the request is rejected with an error code 1010 in a RT 800.
See error code 1010 in
Appendix E –
Understanding error codes
Late application form
  • A promoter submits a BCTESG request (411-40) with a transaction date outside of the three-year application window.
  • The BCTESG request is processed, but the BCTESG payment is refused with a refusal reason 3 in a RT 911.
See refusal reason 3 in
Appendix F –
Understanding refusal reasons

Promoters should inform subscribers that they must complete the BCTESG application form within the required application window (see 5.8.3 BCTESG time constraints).
5.9. EAPs (400-13)

Promoters use 400-13 transactions to report the total amount of each educational assistance payment (EAP). These transactions also report the EAP amounts of each incentive administered by ESDC and provide additional mandatory information for statistical purposes. Promoters are not required to report specific Quebec Education Savings Incentive (QESI) amounts in EAPs to the CESP system. However, if there are QESI amounts in an EAP, they must be included in the total EAP amount.

Promoters are responsible for updating RESP notional accounts to reflect the incentive amounts used in an EAP and they must follow regulations to calculate the amount of each incentive to include in EAPs. For more information, see Chapter 3-2, Post-secondary education and EAPs.

5.9.1. Key fields for 400-13

The following are key fields for EAP transactions (400-13):

Field 400-13 fields Position Notes
Beneficiary SIN 78-86 Must be established in the CESP system. See error codes 7001 and 7031 in Appendix E - Understanding error codes
Academic year start date 101-108 Used for statistical purposes
Academic year length 109-111
EAP grant amount 161-169 The CESG portion of the EAP. Basic and Additional CESG amounts are combined in one notional account of each RESP.
Total EAP amount 170-178 Must be greater than zero. See error code 3006 in Appendix E - Understanding error codes
PSE program length 215 Used for statistical purposes
PSE program type 216-217
Education institution postal code 218-227
PSE program year 228
CLB EAP amount 294-302 The CLB portion of the EAP
SAGES EAP amount 332-340 The SAGES portion of the EAP
BCTESG EAP amount 350-358 The BCTESG portion of the EAP
5.9.2. Key RT 900 fields for 400-13

The CESP system will acknowledge each successfully processed EAP transaction by sending promoters a corresponding RT 900 in their monthly transaction processing report. The following are key fields in these records:

Key RT 900 fields for
400-13
Position Notes
Promoter transaction ID 52-66 Identifies the associated EAP transaction
Grant amount 26-36 The CESG portion of an EAP
CLB amount 127-135 The CLB portion of an EAP
5.9.3. Key RT 910 fields for EAPs with a SAGES amount

If an EAP transaction includes a non-zero SAGES amount, the CESP system will acknowledge a successfully processed EAP transaction by sending promoters a corresponding RT 910 in their monthly transaction processing report. The following are key fields in these records:

Key RT 910 fields for EAPs with SAGES amounts Position Notes
SAGES amount 4-14 The SAGES portion of an EAP
Promoter transaction ID 30-44 Identifies the associated EAP transaction
5.9.4. Key RT 911 fields for EAPs with a BCTESG amount

If an EAP transaction includes a non-zero BCTESG amount, the CESP system will acknowledge a successfully processed EAP transaction by sending promoters a corresponding RT 911 in their monthly transaction processing report. The following are key fields in these records:

Key RT 911 fields for EAPs with BCTESG amounts Position Notes
BCTESG Amount 4-14 The BCTESG portion of an EAP
Promoter Transaction ID 30-44 Identifies the associated EAP transaction
5.9.5. Common Problems for 400-13 transactions
Common Problems for 400-13 Resolution
Beneficiary not established in the system
  • The beneficiary for whom an EAP is paid has not yet been set up in the CESP system. The EAP transaction is rejected with an error code 7001 or 7031 in a RT 800.
See error codes 7001 or 7031 in Appendix E – Understanding error codes
Mandatory data is missing
  • Data is missing from mandatory fields submitted in an EAP transaction. The EAP transaction is rejected with a 7005 error code in a RT 800.
See error code 7005 in Appendix E – understanding error codes
5.10. PSE contribution withdrawals (400-14)

Eligibility: Subscribers are eligible for a post-secondary education (PSE) contribution withdrawal (400-14) only if a beneficiary is eligible for an EAP. While an EAP does not have to be paid in respect of a beneficiary for a subscriber to be eligible for a PSE contribution withdrawal, promoters must receive the same proof of enrolment required for an EAP.

Order of withdrawals: Contributions are considered to be withdrawn from notional accounts in the following order:

  1. assisted contributions
  2. unassisted contributions made in 1998 or later
  3. unassisted contributions made before 1998

No penalties: Unlike contributions withdrawn under other situations, a PSE contribution withdrawal does not trigger the repayment of incentives and does not affect eligibility for Additional CESG.

Tax implications and use of funds: Subscribers can withdraw contributions at any time without tax implications. These amounts are not included on T4As issued to beneficiaries receiving EAPs. While there is no obligation to do so, a subscriber normally uses PSE contribution withdrawals to help pay for a beneficiary’s PSE.

5.10.1. Key fields for 400-14

The following are key fields for a PSE contribution withdrawal (400-14):

Key fields for 400-14 Position Notes
Beneficiary SIN 78-86 Must be established in the CESP system. See error codes 7001 and 7031 in Appendix E – Understanding error codes.
Academic year start date 101-108 Used for statistical purposes
Academic year length 109-111
PSE amount 179-187 Contribution amount withdrawn when a beneficiary is eligible for an EAP
PSE program length 215 Used for statistical purposes
PSE program type 216-217
Education institution postal code 218-227
PSE program year 228
5.10.2. Key RT 900 fields for 400-14

The CESP system will acknowledge each successfully processed PSE contribution withdrawal transaction by sending promoters a corresponding RT 900 in their monthly transaction processing report. The following are key fields in these records:

Key RT 900 field for 400-14 Position Notes
Promoter transaction ID 52-66 Identifies the associated PSE contribution withdrawal transaction
5.10.3. Common problems for 400-14
Common problems for 400-14 transactions Resolution
Beneficiary not established in the system
  • The beneficiary identified in the PSE contribution withdrawal transaction has not yet been successfully set up in the CESP system. The 400-14 is rejected with an error code 7001 or 7031 in a RT 800.
See error code 7001 or 7031 in Appendix E – Understanding error codes
Mandatory data is missing
  • Data is missing from mandatory fields in a PSE contribution withdrawal transaction. The 400-14 is rejected with an error code 7005 in a RT 800.
See error code 7005 in Appendix E – Understanding error codes
5.11. Contract transfers (400-19 and 400-23)

The transfer of funds between RESPs has an impact on notional account balances in each RESP. As promoters are the “book of record” for an RESP, they are responsible for:

  • reporting accurate amounts of the transferred incentives; and
  • updating all notional accounts appropriately after a transfer.

With the exception of CLB amounts, which are beneficiary specific, all other notional account amounts are transferred at the plan level.

Each RESP transfer must be reported to the CESP system in two transactions:

  • Transfer out (400-23) from the relinquishing RESP
  • Transfer in (400-19) to the receiving RESP

Promoters report only the transferred amounts of the incentives administered by ESDC to the CESP system.

5.11.1. Special transfer rules for the CLB

One CLB account per beneficiary: Unlike other incentives which have a single account balance for all beneficiaries at the plan level, promoters must maintain CLB notional accounts for each individual beneficiary in a family RESP. As the CLB may be transferred only between the CLB notional accounts of the same beneficiary, promoters must update the CLB notional account for each individual beneficiary after a transfer.

Partial transfers: Unlike proportional transfer rules for other incentives, the subscriber can choose to transfer all, some or none of the CLB in a partial transfer.

5.11.2. Key fields for transfer transactions

The following are key fields for transfer transactions (400-19 or 400-23):

Key fields for transfer transactions Position Notes
Transaction type 42-43 19 = transfer in
23 = transfer out
Grant amount 152-160 The total amount of transferred CESG (includes both Basic and Additional CESG amounts).
Other specimen plan ID 188-197 Transfers out (400-23) refer to the receiving specimen plan ID. Transfers in (400-19) refer to the relinquishing specimen plan ID.
This must be a valid specimen plan ID in the CESP system. See error code 1005 in Appendix E – Understanding error codes.
Other contract ID 198-212 Transfers out (400-23) refer to the receiving contract ID. Transfers in (400-19) refer to the relinquishing contract ID. While this field is mandatory for transfers, it is not validated by the CESP system.
CLB amount 285-293 The total amount of transferred CLB. The CLB amount reported in a transfer transaction is the combined amount of the CLB transferred for all beneficiaries in the RESP.
SAGES amount 323-331 The total amount of the SAGES transferred.
BCTESG amount 341-349 The total amount of the BCTESG transferred.
5.11.3. Key RT 900 fields for transfer transactions

The CESP system will acknowledge each successfully processed transfer transaction (400-19 or 400-23) by sending promoters a corresponding RT 900 in their monthly transaction processing report. The following are key fields in these records:

Key RT 900 fields for transfer transactions Position Notes
Promoter transaction ID 52-66 Identifies the associated transfer transaction (400-19 or 400-23).
Grant amount 26-36 The total amount of transferred CESG (includes both the Basic and Additional CESG amounts).
CLB amount 127-135 The total amount of transferred CLB.
5.11.4. Key RT 910 fields for a transfer of SAGES

If a transfer transaction includes a non-zero SAGES amount, the CESP system will acknowledge a successfully processed transfer transaction by sending promoters a corresponding RT 910 in their monthly transaction processing report. The following are key fields in these records:

Key RT 910 fields for a transfer of SAGES Position Notes
SAGES amount 4-14 The total amount of transferred SAGES.
Promoter transaction ID 30-44 Identifies the associated transfer transaction (400-19 or 400-23)
5.11.5. Key RT 911 fields for a transfer of BCTESG

If a transfer transaction includes a non-zero BCTESG amount, the CESP system will acknowledge a successfully processed transfer transaction by sending promoters a corresponding RT 911 in their monthly transaction processing report. The following are key fields in these records:

Key RT 911 fields for a transfer of BCTESG Position Notes
BCTESG amount 4-14 The total amount of BCTESG transferred.
Promoter transaction ID 30-44 Identifies the associated transfer transaction (400-19 or 400-23)
5.11.6. Common problems with transfers
Common problems with transfers Resolution
Other specimen plan ID is inaccurate
  • One promoter does not record the accurate specimen plan ID for their RESP on the RESP transfer form. The other promoter enters inaccurate information for the “other specimen plan ID” in their system. When the other promoter submits their transfer transaction to the CESP system it is rejected with an error code 1005 in a RT 800.
See error code 1005 in Appendix E – Understanding error codes

The promoter that received an error code 1005 must contact the other promoter to obtain the accurate specimen plan ID for their RESP and resubmit a new transfer transaction to the CESP system with the accurate specimen plan ID.
5.12. Incentive repayments (400-21)

Federal and provincial regulations and policies specify situations that require incentives to be repaid from an RESP. If incentives administered by ESDC must be repaid, promoters must submit incentive repayment transactions (400-21) with the following information to the CESP system:

  • amount of each incentive to repay
  • reason for repayment

Promoters receive a direct deposit from ESDC to pay all incentive requests that generate payments each month. The CESP system reduces the direct deposit amount for each promoter by the total of all repayment amounts that the promoter submits in 400-21 transactions that month.

5.12.1. Impact of repayments on future payments

CESG and SAGES grant room: The CESG and the SAGES grant room is reduced for a beneficiary each time one of these incentives is paid into an RESP for the beneficiary. However, as the CESG and the SAGES repayments are at the plan level, the grant room of individual beneficiaries is not restored by the repaid amounts of CESG and SAGES.

BCTESG: Repaid BCTESG amounts are lost for the beneficiaries named in the RESP. Subscribers cannot request these BCTESG amounts again for the affected beneficiaries.

CLB entitlement: CLB repayments are at the beneficiary level and do not affect a beneficiary’s lifetime entitlement for the CLB. The CLB amounts repaid for a beneficiary could be received again for that beneficiary.

5.12.2. Key fields for 400-21

The following are key fields for incentive repayment transactions (400-21):

Key fields for 400-21 Position Notes
Beneficiary SIN 78-86 Mandatory only if the CLB amount is greater than zero
Grant amount 152-162 Amount of CESG to repay
Repayment reason 213-214 Reason for repayment
(see 5.12.3 Repayment reasons)
CLB amount 285-293 Amount of CLB to repay
SAGES amount 323-331 Amount of SAGES to repay
BCTESG amount 341-349 Amount of BCTESG to repay

As the CLB is beneficiary specific, promoters must submit a separate repayment transaction for each beneficiary with CLB amounts in a family RESP. All other incentive repayments are at the plan level and may be combined in a single repayment transaction (400-21) without providing a particular beneficiary SIN.

5.12.3. Repayment reasons
Code - Description Examples
01 - Contribution withdrawal Promoters must calculate the amount of CESG and SAGES to repay if contributions are withdrawn when no beneficiary in the RESP is eligible for an EAP.
02 - AIP Repay all incentives when a subscriber receives an accumulated income payment (AIP) from the RESP.
03 - Contract termination Repay all incentives (if applicable) and inform the CESP system that an RESP has been terminated. The transaction is mandatory when RESPs are terminated.
04 - Ineligible transfer Repay all incentives when an ineligible transfer occurs.
05 - Ineligible beneficiary replacement Repay all incentives when an ineligible replacement of a beneficiary occurs.
06 - Payment to educational Institution Repay all incentives if the subscriber pays accumulated earnings to a Canadian designated educational institution instead of taking an accumulated income payment.
07 - Revocation Repay all incentives when the CRA revokes the registration of an RESP.
08 - Ceases to meet sibling only condition Repay incentives, which can only be paid into a sibling only RESP, when a subscriber adds a cousin to a sibling only family RESP.
09 - Deceased Repay incentives when a beneficiary dies. With the exception of CLB, incentives paid for a deceased beneficiary might be used instead by other beneficiaries in the same RESP, or transferred to another RESP.
10 - Overcontribution withdrawal Repay the CESG and the SAGES amounts if contributions were withdrawn to correct an overcontribution. If the amount of overcontribution is $4,000 or less at the time of the withdrawal, the CESG and SAGES amounts to repay are zero. However, a repayment transaction (400-21) must still be submitted to the CESP.
11 - Other Promoter support officers may instruct promoters to use this reason in various situations.
12 - Non-resident Repay incentive amounts if it is determined that the beneficiary did not satisfy required residency criteria to be eligible for incentive payments.
5.12.4. Mandatory transaction when an RESP is terminated

Promoters must inform the CESP system when an RESP has been terminated for any reason by submitting an incentive repayment transaction (400-21) using the “contract termination” repayment reason (03).

Even if there are no incentives in an RESP when the plan is terminated, the termination must still be reported to the CESP system with the incentive amounts set to zero in the 400-21 transaction.

5.12.5. Key RT 900 fields for 400-21

The CESP system will acknowledge each successfully processed repayment transaction (400-21) by sending promoters a corresponding RT 900 in their monthly transaction processing report. The following are key fields in these RT 900:

Key RT 900 fields for 400-21 Position Notes
Promoter transaction ID 52-66 Identifies the associated repayment transaction (400-21)
Grant amount 26-36 The total amount of repaid CESG (could include Additional CESG amounts).
CLB amount 127-135 The total amount of repaid CLB.
5.12.6. Key RT 910 fields for a SAGES repayment

If a repayment transaction includes a non-zero SAGES amount, the CESP system will acknowledge a successfully processed repayment transaction by sending promoters a corresponding RT 910 in their monthly transaction processing report. The following are key fields in these records:

Key RT 910 fields for a SAGES repayment Position Notes
SAGES amount 4-14 The total amount of repaid SAGES.
Promoter transaction ID 30-44 Identifies the associated repayment transaction (400-21)
5.12.7. Key RT 911 fields for a BCTESG repayment

If a repayment transaction includes a non-zero BCTESG amount, the CESP system will acknowledge a successfully processed repayment transaction by sending promoters a corresponding RT 911 in their monthly transaction processing report. The following are key fields in these records:

Key RT 911 fields for a BCTESG repayment Position Notes
BCTESG amount 4-14 The total amount of BCTESG repaid.
Promoter transaction ID 30-44 Identifies the associated repayment transaction (400-21)
5.12.8. Common problems for 400-21
Common problems for 400-21 Resolution
Promoters do not notify the CESP system about terminations
  • A subscriber transferred all of the funds in an RESP to another RESP administered by another promoter and terminates the plan. The relinquishing promoter submitted only a transfer out (400-23) transaction to the CESP system. That promoter does not also submit a mandatory repayment transaction (400-21) with a repayment reason 03 (Contract Termination). This RESP may be identified as a compliance issue in a CESP compliance review.
The promoter of the relinquishing RESP must submit a repayment transaction (400-21) with a repayment reason of 03 (Contract Termination) after updating all notional account balances to zero. All repayment amounts will be zero in this transaction.
Using reversals instead of repayments
  • A subscriber realizes that some contributions for a beneficiary did not receive the CESG due to the annual limit (refusal reason 1) and wants to withdraw the unassisted contributions. The subscriber would like to withdraw the contributions that did not receive grant and would like the promoter to reverse all unassisted contributions to avoid having to repay the CESG. As this is not an administrative error, the promoter cannot reverse the unassisted contributions.
The promoter should advise the subscriber that nothing can be done about the unassisted contributions that year. The promoter should also explain how the annual CESG limit per beneficiary applies across all RESPs and help the subscriber(s) plan contributions in subsequent years.
Using repayments instead of reversals
  • A promoter realizes that due to an administrative error made by the promoter, a contribution transaction (400-11) that received the CESG was submitted for the wrong beneficiary in a family RESP. The promoter submits a repayment transaction (400-21) to repay the CESG amount received for the wrong beneficiary and then submits a new contribution transaction for the correct beneficiary. The original beneficiary’s RESP contribution limits, the CESG lifetime limits and the CESG grant room are not restored after a repayment transaction.
The promoter should have reversed the 400-11 transaction instead of using a repayment transaction. To correct the problem, the promoter should now reverse the original contribution transaction and also reverse the repayment transaction.

5.13. Termination adjustments (400-22)

A termination adjustment transaction (400-22) should be used only to report the amount of incentives to the CESP system that cannot be repaid due to investment losses when an RESP is terminated.

For example: An RESP had an initial fair market value of $3,000 due to $2,500 in contributions and $500 in CESG. The subscriber decides to terminate the RESP after a significant loss when the fair market value was only $400. The promoter must repay (400-21) a CESG amount which is the lessor of the RESP fair market value and the CESG account balance ($400 in this example).

To balance the CESG liability of $500, the promoter must also report a $100 CESG loss to the CESP system by submitting a termination adjustment transaction (400-22).

5.13.1. Key fields for 400-22

The following are key fields in a termination adjustment transaction (400-22):

Field Position Notes
Grant amount 152-162 Amount of CESG adjustment
CLB amount 285-293 Amount of CLB adjustment
SAGES amount 323-331 Amount of SAGES adjustment
BCTESG amount 341-349 Amount of BCTESG adjustment
5.13.2. Key RT 900 fields for 400-22

The CESP system will acknowledge each successfully processed termination adjustment transaction (400-22) by sending promoters a corresponding RT 900 in their monthly transaction processing report. The following are key fields in these RT 900:

Key RT 900 fields for 400-22 Position Notes
Promoter transaction ID 52-66 Identifies the associated termination adjustment transaction (400-22)
Grant amount 26-36 CESG amount lost
CLB amount 127-135 CLB amount lost
5.13.3. Key RT 910 fields for a SAGES termination adjustment

If a termination adjustment transaction includes a non-zero SAGES amount, the CESP system will acknowledge a successfully processed transaction by sending the promoter a corresponding RT 910 in their monthly transaction processing report. The following are key fields in these records:

Key RT 910 fields for a SAGES termination adjustment Position Notes
SAGES amount 4-14 SAGES amount lost
Promoter transaction ID 30-44 Identifies the associated termination adjustment transaction (400-22)
5.13.4. Key RT 911 fields for a BCTESG termination adjustment

If a termination adjustment transaction includes a non-zero BCTESG amount, the CESP system will acknowledge a successfully processed transaction by sending the promoter a corresponding RT 911 in their monthly transaction processing report. The following are key fields in these records:

Key RT 911 fields for a BCTESG termination adjustment Position Notes
BCTESG amount 4-14 BCTESG amount lost
Promoter transaction ID 30-44 Identifies the associated termination adjustment transaction (400-22)
5.13.5. Withdrawing contributions after a loss

Order of losses: Promoters must apply losses to earnings first and then to contributions. Once all contributions in the RESP have been depleted, any remaining loss is considered to be applied proportionally to the incentives remaining in the RESP.

Fair market value test: When subscribers request contribution withdrawals for any reason, promoters must verify if the RESP fair market value is large enough for the withdrawal amount. This applies even when the RESP is not being terminated and also includes PSE contribution withdrawals.

Contribution withdrawal limit: Promoters must subtract all incentive notional account balances from the fair market value to find the maximum contribution withdrawal amount.

For example, a subscriber asked for all contributions to be returned when his RESP was terminated. The following table shows the notional accounts and the fair market value for the RESP at that time.

RESP fair market value Contributions CESG CLB SAGES
$2,600 $2,500 $1000 600 $500

In this example, the combined incentive notional accounts would be $2,100 which means the contribution limit would be $500 (subtract $2,100 from $2,600). Therefore, the promoter could only return $500 of contributions to the subscriber after repaying all incentives remaining in the RESP.

Chapter 1-4: Registered Education Savings Plans

A Registered Education Savings Plan (RESP) is an education savings plan (ESP) that has been registered with the Canada Revenue Agency (CRA). It is a savings vehicle intended to encourage saving for post-secondary education. More precisely, it is an arrangement between the RESP promoter and subscriber(s).

The subscriber can be:

  • an individual;
  • an individual and their spouse or common-law partner; or
  • a public primary caregiver.

The subscriber may make contributions to an RESP. In return, the RESP promoter agrees to use the accumulated funds to make educational assistance payments (EAPs) to an eligible beneficiary designated by the subscriber. RESP earnings are not taxable until they are withdrawn to offset the costs of the beneficiary’s post-secondary education.

An RESP must be opened to receive payments of education savings incentives in respect of eligible beneficiaries.

See Appendix C for a list of acronyms and terms used in this guide.

1. RESPs - An overview

RESP promoters offer education savings plans (ESPs) designed to help their clients save for a child's post-secondary education (PSE).

An ESP contract can be registered if it meets certain terms and conditions stipulated in Section 146.1 of the Income Tax Act (ITA). The ESP then becomes an RESP. Earnings in the RESP are not taxable until they are withdrawn.

Once an ESP has been registered, it is subject to rules that govern contributions, withdrawals, earnings, and the transfer of monies. Compliance with these rules ensures the registered status of the RESP.

The RESP contract will include terms and conditions that the subscriber must agree to, which vary depending on the type of plan. For example:

  • the need for making contributions to the RESP over the term of the contract; or
  • whether contributions will be intermittent or on a regular basis (at the discretion of the subscriber).

The RESP promoter invests the funds contributed by the subscriber. When the beneficiary attends a post-secondary educational institution, the earnings and education savings incentives paid to the plan can be used to make EAPs that will help to offset related education expenses. Terms and conditions prescribe when and how these earnings are paid. See Chapter 3-2: Post-secondary education and educational assistance payments (EAPs).

When a beneficiary is eligible for an EAP, the subscriber can choose to withdraw some or all of the contributions that they have invested. While there is no requirement to do so, these PSE contribution withdrawals could be used to help pay for the beneficiary’s PSE expenses.

1.1. RESPs may qualify for education savings incentives

To encourage Canadians to plan and save for their children’s post-secondary education, the Government of Canada offers two federal education savings incentives.

  • Canada Education Savings Grant (CESG) which may include:
    • Basic CESG; and
    • Additional CESG.
  • Canada Learning Bond (CLB)

An RESP may also include provincial education savings incentives from one of the three following designated provincial programs:

  • Saskatchewan Advantage Grant for Education Savings (SAGES). ESDC administers this education savings incentive through an agreement with the province of Saskatchewan.
  • British Columbia Training and Education Savings Grant (BCTESG). ESDC administers this education savings incentive through an agreement with the province of British Columbia.
  • Quebec Education Savings Incentive (QESI) is a provincial education savings incentive established under Quebec legislation. ESDC does not administer this provincial incentive.

Education savings incentives may be deposited into an RESP if the required eligibility criteria are satisfied. They can enhance RESP earnings and be used as an EAP by an eligible beneficiary.

When an ESP is opened and registered and the subscriber makes contributions to that RESP in respect of a beneficiary, the contributions may qualify for the CESG. The beneficiary may also qualify for the CLB and/or provincial incentives. However, the CLB, and the BCTESG do not require contributions to an RESP. (More information about each of these incentives is provided in Section 2: Education savings incentives.)

2. Establishing the RESP

There are four parties involved in the process of opening and registering an ESP. They are:

  • the subscriber
  • the RESP promoter
  • ESDC
  • the CRA

2.1. Opening the ESP

A subscriber enters into an ESP contract with an RESP promoter of their choice. The RESP promoter then arranges to have the plan registered with the CRA.

Typically, the subscriber is the child's parent or parents, but it can also be a beneficiary, a grandparent, another family member, or someone not related to the beneficiary. The ESP can be opened by one person or it can be opened jointly by spouses or common-law partners as well as child care agencies.

There are three different types of ESPs:

  • family plans
  • individual (non-family) plans
  • group plans

The subscriber(s) must choose the RESP promoter that they would like to deal with and decide what type of plan that they will open. See 4. Type of RESPs, later in this chapter.

2.2. Registering the ESP

An ESP contract must meet certain conditions in order for it to be registered with the CRA.

An RESP promoter must submit certain information to ESDC when applying for the registration of an ESP on behalf of the subscriber, as follows:

  • An RESP promoter’s application form must be filled out with accurate and valid information, according to procedures established by the CRA, and then submitted to the RESP promoter’s head office for processing.
  • The application form must also include a notice to the subscriber(s) that an overcontribution to the plan may result in a penalty tax.

Any new contract submitted to the Canada Education Savings Program (CESP) system will be treated as a request to register the plan with the CRA.

The CRA will register only those contracts that meet all registration requirements.

2.3. Social Insurance Numbers (SINs)

The SIN is a nine-digit number used in the administration of various Canadian government programs. The Social Insurance Registry (SIR), ESDC, administers the SIN Program.

When an ESP is opened, a SIN is required for:

  • the ESP subscriber(s); and
  • the ESP beneficiary(s).

When requesting the Additional CESG and/or the CLB, a SIN is required for:

  • the beneficiary’s individual primary caregiver (PCG); or
  • the individual PCG’s cohabiting spouse or common-law partner.

The SINs are used to:

  • request the CESG and the CLB;
  • ensure that accurate RESP records are maintained for each beneficiary;
  • track contributions to RESP(s) for each beneficiary;
  • verify each beneficiary’s eligibility for education savings incentives administered by ESDC;
  • track incentive payments administered by ESDC to RESP(s) in respect of each beneficiary;
  • track repayment of incentives administered by ESDC (for example, when withdrawals are made from an RESP);
  • track EAPs made in respect of each beneficiary; and
  • ensure that tax slips are issued to the right person and correctly

If a family member or friend wants to open an RESP and name a child as the RESP beneficiary, they will need to obtain the SIN of the child from the child’s custodial parent or legal guardian.

The child’s custodial parent(s) or legal guardians can apply for a SIN for their child and there are no fees associated with a SIN application. Visit the Service Canada Web site for the SIN application form and related information.

The SIN can be obtained by applying in person at a Service Canada office or by mail. After successfully processing a request, Service Canada provides the new SIN information in a confirmation letter. Service Canada no longer issues SIN cards.

2.3.1. Verifying the beneficiary's SIN

The SIN is a key piece of information that the CESP system uses to verify a beneficiary’s eligibility for the applicable education savings incentive(s). When an RESP is entered into, the RESP promoter submits the beneficiary’s SIN information electronically to the CESP system which, in partnership with the SIR, validates the beneficiary’s information.

If the beneficiary information submitted by the RESP promoter does not match the information contained in the SIR, the submission will result in an error and will lead to the information being rejected by the CESP system. A report will then be sent to the RESP promoter, identifying the field(s) in error. The RESP promoter will have to verify the information provided by the subscriber and resubmit the data to the CESP system.

Until the beneficiary information is successfully processed by the CESP system, any financial information including requests for payments of the CESG, the CLB, the SAGES and the BCTESG, will cause errors. The beneficiary information must be successfully processed and established before any financial transactions related to that beneficiary can be processed. For more information see Chapter 1-3: The CESP system and Interface Transaction Standards (ITS).

3. Contributions and their limits

Contributions are deposits made to an RESP by a subscriber in respect of a beneficiary and remain the property of the subscriber. While the subscriber cannot deduct contributions made to an RESP from their taxable income, earnings on contributions are tax sheltered.

Note: Tax on earnings

Earnings on contributions made to an RESP are not taxable until the earnings are used as part of an EAP in respect of the beneficiary or until they are paid to the subscriber in an accumulated income payment (AIP) if the beneficiary does not qualify for an EAP.

When beneficiaries use an EAP to help finance their post-secondary education, they will be responsible for paying any taxes on the EAP. Since students generally have limited income, the tax paid will usually be minimal.

If the beneficiary does not attend post-secondary education and the earnings are paid to the subscriber, the subscriber will be responsible for paying any required taxes.

For more information see Chapter 3-3: Options for assets remaining in the RESP .

While there is no limit to the number of RESPs that can be opened in respect of a beneficiary, the amount that can be contributed across all existing RESPs for one beneficiary are limited to the following:

Table: Contribution limits
Period Annual contribution

limit per beneficiary
Lifetime contribution

limit per beneficiary
1998 to 2006 $4,000 $42,000
Since 2007 No limit $50,000

A beneficiary's contribution limit is based on the total of all contributions, by all subscribers into all RESPs. The annual and lifetime limits cannot be circumvented by entering into multiple plans.

Overcontributions to an RESP are subject to a penalty tax. For more information, see the section 5. Overcontributions.

3.1. What are not considered to be contributions

Earnings on the contributions are not considered to be contributions when calculating the annual and lifetime contribution limits.

The $25.00 fee paid to an RESP promoter, for a first-time request for the payment of the CLB for a beneficiary, is not considered to be a contribution. This payment is to assist in paying for the administrative costs associated with the establishment of these plans.

Federal education savings incentives are not considered to be RESP contributions when calculating contribution limits.

Provincial education savings incentives are not considered to be RESP contributions when calculating contribution limits. These payments are treated in the same way as federal incentives and do not attract federal incentives themselves.

Assisted and unassisted contributions

Contributions to an RESP are considered to be either "assisted" or "unassisted":

  • An assisted contribution is a contribution made to an RESP that has attracted the CESG.
  • An unassisted contribution is a contribution made to an RESP that has not attracted the CESG.
3.1.1. Insurance provisions

Some subscribers may decide to enter into an insurance contract as part of their RESP to ensure that contributions to the RESP will continue in the event of certain circumstances (such as the death of the subscriber). This insurance contract will include the payment of insurance premiums. These premiums are not considered to be contributions to the RESP.

Note: Insurance proceeds: Payments made to an RESP in accordance with the terms of an insurance contract are referred to as "insurance proceeds" and are considered to be contributions.

Depending on how the plan is structured, administration and trustee fees may or may not be considered to be contributions. If administration or trustee fees are charged outside the plan, they are not considered contributions. If they are charged within the plan, they can be considered part of the contributions and are therefore subject to contribution limits.

Note: Fees are not to be charged to the education savings incentive portions of an RESP.

Contact the CRA - Registered Plans Directorate for more information at 1-800-267-3100.

4. Types of RESPs

There are three types of RESPs: individual (non-family) plans; family plans; and group plans. The following is a description of each of these plan types.

4.1. Individual (non-family) plans

The features of an individual (non-family) plan are as follows:

  • There is a single subscriber (includes child care agencies) or joint subscribers that have a spousal or common-law relationship.
  • There is only one beneficiary at any given time.
  • The beneficiary does not need to be related to the subscriber.
  • There is no restriction on the age of the beneficiary - it can be a child or an adult.
  • There is no restriction on who can be named as the beneficiary. A subscriber could be the beneficiary of their own plan.

The subscriber is responsible for presenting the beneficiary's information to the RESP promoter.

4.1.1. Naming a replacement beneficiary in an individual plan

A subscriber can replace an existing beneficiary with a new beneficiary if their contract allows for it. When this happens, the original beneficiary's contribution history could be attributed to the replacement. This could affect the annual and lifetime contribution limits for the new beneficiary, which could result in a penalty tax for all subscribers of that beneficiary.

There will not be any tax consequences to the replacement beneficiary if one of the following conditions is met:

  • The replacement beneficiary is under 21 and is a sibling of the original beneficiary.

    OR

  • Both the original and replacement beneficiaries are under 21 and are related by blood or adoption to the original subscriber of the RESP.

The subscriber will need to present the RESP promoter with all of the necessary information relating to the replacement beneficiary. The RESP promoter must then submit that information to the CESP system.

For more information, see section 3. Contributions and contribution limits and section 5. Overcontributions.

4.1.2. Making contributions to an individual plan

A subscriber can make contributions to an individual (non-family) plan as long as contribution limits for the beneficiary have not been exceeded. However, contribution limits can be affected by any transfer of monies from one RESP to another. For more information on transfers, see 7. Transfers between RESPs, and Chapter 3-1: RESP transfers and the education savings incentives.

Contributions to an individual (non-family) plan must stop at either:

  • 31 years after the end of the year the RESP was opened (35 years in the case of a specified plan)

    OR

  • 31 years after the end of the year of the "earliest effective date that applies" if a transfer has taken place.
Note: Earliest effective date when a transfer has taken place

When a transfer is made between RESPs, the earliest effective date of the two plans must be used to determine the date when plan contributions must stop in the receiving plan. See Chapter 3-1: RESP transfers and the education savings incentives.

4.2. Family plans

The features of a family plan are as follows:

  • There is a single subscriber or joint subscribers that have a spousal or common-law relationship.
  • There can be one or more beneficiaries at any given time.
  • The beneficiaries must be related to the original subscriber of the RESP, either by blood or by adoption.
  • An individual can become a beneficiary of a family RESP only if that individual has not yet turned 21 or if the individual was, just before joining the family RESP, a beneficiary under another family RESP.
  • Contributions must be made in the name of a specific beneficiary.
  • Annual and lifetime RESP contribution limits apply to each beneficiary. Contributions made to any RESP in respect of a beneficiary count toward that beneficiary's annual and lifetime contribution limits.
Note: Family member - Relationship

Each beneficiary of a family plan must be related by blood or adoption to each living subscriber under the plan or be related to a deceased original subscriber. Under the ITA, a "blood relationship" is that of a parent and child (or grandchild or great grandchild) or that of a brother or sister. The subscriber's niece, nephew, aunt, uncle and cousin do not meet the definition of "blood relative". They, therefore, do not qualify as a beneficiary under a family plan.

An individual is not considered to be a "blood relative" of himself / herself.

An adopted child is related by adoption to his parents and grandparents. Stepchildren are related to their stepparents by virtue of being the children of their parent's spouse or common-law partner. This is referred to as "adoption in fact".

Only plans where all beneficiaries are siblings can receive payments of the following incentives:

  • Additional CESG
  • CLB
  • SAGES
  • BCTESG

See the applicable incentive chapters in Section 2: Education savings incentives.

4.2.1. Adding a beneficiary to a family plan

If the terms of a subscriber's contract allow for it, the subscriber can add beneficiaries to their plan at any time. However, the additional beneficiaries must still be related to the original subscriber of the RESP, either by blood or by adoption.

Furthermore, if the Additional CESG, the CLB or the BCTESG have been paid into the RESP, any additional beneficiaries must be siblings of the existing beneficiaries. If not, all amounts of the Basic CESG, the Additional CESG, the CLB and the BCTESG will need to be repaid. While the SAGES can only be paid into a sibling-only plan, a cousin can be added to the plan without having to repay the SAGES already in the RESP.

The eligibility criteria for adding a new beneficiary are as follows:

  • Additional beneficiaries must be related to the original subscriber of the RESP, either by blood or adoption.
  • Additional beneficiaries must be under 21 at the time they are added or must have been beneficiaries under another family RESP immediately before being added.
  • The additional beneficiary's SIN must be given to the RESP promoter.
4.2.2. Naming a replacement beneficiary in a family plan

A subscriber can replace an existing beneficiary with a new beneficiary if their contract allows for it. When this happens, the original beneficiary's contribution history could be attributed to the replacement. This could affect the annual and lifetime contribution limits for the new beneficiary, which could result in a penalty tax for all subscribers of that beneficiary.

There will not be any tax consequences to the replacement beneficiary if one of the following conditions is met:

  • the replacement beneficiary is under 21 years of age and is a sibling of the original beneficiary;

    OR

  • the original and replacement beneficiaries are under 21 years of age and are related by blood or adoption to an original subscriber of the RESP.

Note: The replacement beneficiary must comply with the sibling-only requirement associated with the Additional CESG, the CLB and the BCTESG. Otherwise, these education savings incentives must be repaid. While the SAGES can only be paid into a sibling-only plan, a cousin can be added to the plan without having to repay the SAGES already in the RESP. For more information, see Section 2: Education savings incentives.

The subscriber will need to present the RESP promoter with any necessary information relating to the replacement beneficiary. The RESP promoter must then submit that information to the CESP system.

See section 5. Overcontributions.

4.2.3. Making contributions to a family plan

A subscriber can make contributions to a family plan in respect of a beneficiary as long as that beneficiary is under 31 and the beneficiary's contribution limit has not been exceeded. In addition, the beneficiary's contribution limit can be affected by any transfer of monies from one RESP to another. For more information on transfers, see 7. Transfers between RESPs, and Chapter 3-1: RESP transfers and the education savings incentives.

Contributions for an individual beneficiary must stop at the earliest of three applicable dates:

  • the date that the beneficiary turns 31;

    OR

  • 31 years after the end of the year the RESP was opened;

    OR

  • 31 years after the end of the year of the “earliest effective date that applies,” if a transfer has taken place, (refer to the section 4.1.2. Making contributions - Earliest effective date when a transfer has taken place).

Contributions to a family plan with two or more beneficiaries must be made in respect of a specific beneficiary in the plan.

4.3. Group plans

The features of a group plan are as follows:

  • Each group plan is a collection of individual (non-family) RESPs.
  • Group plans are usually referred to and marketed as "Education Funds" or "Scholarship Funds".
  • Each group plan is a group trust.
  • Group plans are administered based on an age cohort concept. This means that RESP contracts for beneficiaries of the same age are administered together.
  • RESP contributions and education savings incentives are tracked per individual beneficiary but are pooled for investment purposes. Pooling is based on all beneficiaries having the same year of eligibility (i.e. they are in the same age cohort and are expected to attend post-secondary education in the same years - usually set to be three or four years).
  • Payments for post-secondary education assistance are determined by the number of beneficiaries who are eligible to receive such payments in the year of eligibility.
  • Earnings associated with the CESG, the CLB, the SAGES and the BCTESG can only be shared among the beneficiaries of a particular RESP. As group plans are a collection of individual (non-family) plans, these earnings cannot be shared among a group cohort.
4.3.1. Making contributions in a group plan

The subscriber must enter into a contractual arrangement with the RESP promoter, specifying a particular savings program. The contract will include the frequency of contributions to be made, the amount of the contributions, and investment options.

The subscriber will then make deposits with the RESP promoter for the duration of the contract. The RESP promoter will credit the contributions to a deposit account in the subscriber's name within the group trust and then credits any education savings incentives received by the beneficiary to a separate deposit account in the child's name (that is also within the group trust). Income earned on contributions can be shared within the group plan; income earned on education savings incentives cannot be shared.

5. Overcontributions

There are limits on the total amount of RESP contributions that can be made in respect of a beneficiary, across all existing RESPs. These contribution limits are:

Table: Contribution limits
Period Annual contribution

limit per beneficiary
Lifetime contribution

limit per beneficiary
1998 to 2006 $4,000 $42,000
Since 2007 No limit $50,000

An overcontribution occurs when the total of contributions made in respect of a single beneficiary exceeds that beneficiary's limit. See 3.1 What are not considered to be contributions?

RESP promoters are required to ensure that contributions do not exceed these annual and lifetime limits. See 3. Contributions and contribution limits.

However, an overcontribution can occur when several subscribers contribute to different RESPs for the same beneficiary without coordinating their contributions. For more information about overcontributions and taxation, contact the CRA at 1-800-267-3100.

The withdrawal of overcontributions will reduce the amount of overcontributions subject to tax, but such a withdrawal will not reduce the total contributions considered to have been made in respect of the beneficiary. This withdrawn amount of overcontributions will still be counted toward the total of contributions made in their respect for the purpose of determining their lifetime limit. Lifetime contribution room is not restored when contributions or overcontributions are withdrawn.

Withdrawing contributions may impact the CESG and the SAGES paid into the RESP. For more information, refer to the applicable chapter in Section 2 - Education savings incentives.

5.1. Overcontribution due to a transfer

An overcontribution situation can also occur when monies are transferred from one RESP to another. When a transfer is made, the contribution history of the beneficiaries in the transferring plan could be attributed to the beneficiaries in the receiving plan, resulting in overcontributions. The contribution history will not be applied to receiving plan beneficiaries if one of the following conditions is met:

The transferring and receiving plans have a common beneficiary.

OR

A beneficiary in the receiving plan is a sibling of a beneficiary in the transferring plan.

AND

The receiving plan is a family plan.

OR

A beneficiary of the receiving plan is a sibling of a beneficiary in the transferring plan.

AND

The receiving plan is an individual plan.

AND

The beneficiary of the receiving plan was under 21 years of age when the receiving plan was entered into.

Overcontributions exist in respect of a beneficiary. In the event that an overcontribution arises from a transfer, each subscriber who contributed to any plan in respect of the beneficiary in question will be responsible for penalty taxes on the overcontributions.

For more information about overcontributions and taxation, contact the CRA Registered Plans Directorate at 1-800-267-3100.

Determining if the contribution history of the transferring plan applies to the receiving plan

5.2. Overcontributions due to a beneficiary replacement

When a subscriber chooses to replace the beneficiary of an RESP with another individual, the contribution history of the former beneficiary could be attributed to the replacement beneficiary which may result in overcontributions and associated tax penalties. Replacement of a beneficiary will not result in overcontributions if one of the following conditions is met:

  • the replacement beneficiary is a sibling of the former beneficiary and is not yet 21 at the time of the replacement;

    OR

  • neither of the beneficiaries have yet turned 21 and both are related to the original subscriber of the RESP, either by blood or by adoption.

If the replacement beneficiary doesn't meet any of the above conditions, this beneficiary could be in an overcontribution situation with associated tax penalties.

5.3. Penalty taxes on overcontributions

When an overcontribution occurs, every subscriber is required to pay a 1% per month tax on their share of the overcontribution until it is withdrawn.

For more information about overcontributions and taxation, contact the CRA - Registered Plans Directorate at 1-800-267-3100.

6. Transfers between RESPs

The ITA allows for the transfer of monies from one RESP to another unless the contract terms of a specific plan do not permit it. If subscribers decide to make a transfer, they can choose to transfer all of the monies in the RESP or only part of them.

Transfers may result in the repayment of the CLB, the SAGES, the BCTESG and the entire CESG amounts (which would include the Basic CESG and the Additional CESG) if certain conditions are not satisfied. Conditions for eligible transfers of each education savings incentive are described in Chapter 3-1 RESP transfers and the education savings incentives.

When a transfer is made between different RESP promoters, the RESP promoter receiving the transferred monies must also receive sufficient information to administer the RESP on a continuing basis, such as:

  • subscriber information;
  • beneficiary information;
  • the effective date of the plan;
  • information about contributions; and
  • information about the education savings incentives.

The RESP transfer form can be downloaded from the Forms tab at Canada.ca/RESPresources.

7. Distribution of assets from an RESP

There are six different ways that a distribution of RESP assets can be made by an RESP promoter:

  • EAPs;
  • accumulated income payments (AIPs);
  • rollover of RESP investment earnings into a Registered Disability Savings Plan (RDSP);
  • rollover of RESP earnings to a registered retirement savings plan (RRSP);
  • payments to a designated educational institution in Canada; and
  • payments of contributions to either the subscriber or the beneficiary.

For more information, see Chapter 3-3: Options for assets remaining in the RESP.

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