What is Canada Education Savings Grant (CESG)
The Canada Education Savings Grant (CESG) is a grant from the Government of Canada paid directly into a beneficiary's Registered Education Savings Plan (RESP). It adds 20 percent to the first $2,000 in contributions made into an RESP on behalf of an eligible beneficiary each year.
BREAKING DOWN Canada Education Savings Grant (CESG)
The Canada Education Savings Grant is an incentive program designed to encourage people to save for a child's education and to lessen the financial burden of a post-secondary education.
Payment of the CESG depends on contributions made into the RESP. Money in an RESP can be used to help pay for full-time or part-time studies in an apprenticeship program, a CEGEP, trade schools, colleges and universities.
How the Canada Education Savings Grant Works
To gain access to the Canada Education Savings Grant, personal contributions must be made into a Registered Education Savings Plan (RESP). Anyone can open an RESP for a child–not just a child’s parent.
The CESG provides 20 cents on every dollar contributed per year, up to a maximum of $500 on a contribution of $2,500. If a contribution cannot be made in any given year, a plan holder is allowed to catch up in future years. Contributions can be made to a CESG until the end of the calendar year in which the child turns 17.
Depending on the primary caregiver's income, a child may also be eligible for an additional 10 to 20 percent contribution placed into their RESP from the Canada Education Savings Grant.
Eligibility for the Canada Education Savings Grant
The Canada Education Savings Grant is available until the end of the calendar year in which the child turns 17, as long as the child is a Canadian resident, has a valid Social Insurance Number, an RESP has been opened in their name, and a request is made for the grant. To be eligible for the grant, a caregiver must contribute to a child’s RESP prior to the end of the calendar year in which they turn 15 years old.
Sixteen or 17-year-old children may be eligible to receive the Canada Education Savings Grant, if at least one of the following conditions is met:
- A total minimum of $2,000 was contributed to (and not withdrawn from) the RESP of the child before the end of the calendar year they turned 15; or
- A minimum annual contribution of $100 was made to (and not withdrawn from) the RESP in at least four of the years before the end of the calendar year the child turned 15