Educational Assistance Payments (EAPs)
An educational assistance payment (EAP) is the amount paid to a beneficiary (a student) from an RESP to help finance the cost of post-secondary education. An EAP consists of the Canada education savings grant, the Canada learning bond (CLB), amounts paid under a provincial education savings program and the earnings on the money saved in the RESP. The promoter reports EAPs in box 042 on a T4A, Statement of Pension, Retirement, Annuity, and Other Income slip and sends a copy to the student. The student includes the EAPs as income on their Income Tax and Benefit return for the year the student receives them.
A beneficiary must be a resident of Canada in order to receive the CESG or CLB as part of the EAP. Contact the appropriate provincial authorities to determine residency requirements for the eligibility conditions for provincial grants and incentives.
The promoter can only pay EAPs to or for a student if one of the following situations applies:
- the student is enrolled in a qualifying educational program. This includes students attending a post-secondary educational institution and those enrolled in distance education courses, such as correspondence courses, provided by such institutions; or
- the student has attained the age of 16 years and is enrolled in a specified educational program.
A beneficiary is entitled to receive EAPs for up to six months after ceasing enrolment, provided that the payments would have qualified as EAPs if the payments had been made immediately before the student's enrolment ceased.
A qualifying educational program is an educational program at post-secondary school level, that lasts at least three consecutive weeks, and that requires a student to spend no less than 10 hours per-week on courses or work in the program.
A specified educational program is a program at post-secondary school level that lasts at least three consecutive weeks, and that requires a student to spend no less than 12 hours per-month on courses in the program.
A post-secondary educational institution includes:
- a university, college, or other designated educational institution in Canada;
- an educational institution in Canada certified by Employment and Social Development Canada (ESDC) as offering non-credit courses that develop or improve skills in an occupation;
- a university outside Canada that has courses at the post-secondary school level at which the beneficiary was enrolled on a full-time basis in a course of not less than three consecutive weeks; and
a university, college or other educational institution outside Canada that has courses at post-secondary school level at which a beneficiary was enrolled in a course of not less than 13 consecutive weeks.
Limit on EAPs
For RESPs entered into after 1998, the maximum amount of EAPs that can be made to a student as soon as he or she qualifies to receive them is:
- for studies in a qualifying educational program – $5,000, for the first 13 consecutive weeks in such a program. After the student has completed the 13 consecutive weeks, there is no limit on the amount of EAPs that can be paid if the student continues to qualify to receive them. If there is a 12-month period in which the student is not enrolled in a qualifying educational program for 13 consecutive weeks, the $5,000 maximum applies again; or
- for studies in a specified educational program – $2,500, for the 13-week period whether or not the student is enrolled in such a program throughout that 13-week period.
Subject to the terms and conditions of the RESP, the promoter can supplement the $5,000 or $2,500 EAP by paying a portion of the contributions tax-free to the beneficiary.
Employment and Social Development Canada may, on a case-by-case basis, approve an EAP amount of more than the above limit if the cost of tuition plus related expenses for a particular program is substantially higher than the average. For information on how to request approval of an EAP of more than $5,000 or $2,500, promoters should call the Canada Education Savings Program at 1-888-276-3624.
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