Canada Education Savings Grant - After you’ve applied
6. After you've applied
Grant room (carry forward)
Children residing in Canada since 1998, or born in the years following, qualify for $400 in Basic CESG room per year ($500 as of January 1, 2007) until the year of their 17th birthday. This is still the case for children who are not named as RESP beneficiaries. For the first $2,500 of RESP contributions in a given year the Basic CESG paid into the RESP is $500.
A beneficiary can benefit from more than $500 of Basic CESG per year, up to a maximum of $1,000 under certain circumstances. You can carry over unused Basic CESG from previous years by contributing more than $2,500 per year. This way, you could get up to $1,000 in Basic CESG per calendar year if you have unused amounts from previous years. The maximum lifetime CESG (Basic and Additional CESG) is $7,200 per child.
For example, if a subscriber decides to interrupt contributions for a period of one year, the unused Basic CESG room for that period will be carried forward for use in future years. Upon resuming contributions, the subscriber may decide to contribute $5,000 into the RESP. Because the Basic CESG room has been carried forward, and provided that the lifetime limit of $7,200 in CESG has not been exceeded, the amount of Basic CESG paid will be $1,000. If eligible, the same contribution may attract an extra $100 in Additional CESG.
When a beneficiary has more than one plan
The CESG will be paid on a first-come, first-served basis, subject to annual CESG limits and lifetime CESG limits. In the event that two subscribers make contributions in the same month to two separate RESPs, the subscriber's contribution dated earliest in the month will receive the CESG. In the event that the contributions are made on the same day, the CESG will be pro-rated.
It is important for subscribers to communicate in order to maximize the yearly CESG allotment while respecting the lifetime contribution limit of $50,000.
When a child does not continue education after high school
If your child does not continue education immediately after high school, the RESP can stay open for up to 36 years, and a specified plan can stay open for up to 41 years. That means your child can use the money if they decide to attend school later. More information is available from the Canada Revenue Agency.
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