What Is the 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% to the first $2,500 in contributions made into an RESP on behalf of an eligible beneficiary each year.
How the Canada Education Savings Grant (CESG) Works
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. The payment of the CESG depends on contributions made into the RESP. Money in an RESP can be used to help pay for part-time or full-time studies in an apprenticeship program, or at a CEGEP, trade school, college, or university.
To gain access to the Canada Education Savings Grant, personal contributions must be made into a Registered Education Savings Plan (RESP). Anyone can open a RESP for a child—not just a child’s parent.
What It Provides, and When Contributions Can Be Made
The CESG provides 20 cents on every dollar contributed per year, up to a maximum of $500 per year, which makes annual contributions of $2,500 eligible for matching. If a contribution cannot be made in any given year, a plan holder is allowed to make catch up contributions 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% match placed into their RESP from the Canada Education Savings Grant.
Eligibility for the Canada Education Savings Grant
Matching contributions can be made for an individual child until December 31 of the calendar year in which the child turns 17. To be eligible for CESG matching, there are a few key stipulations.
- 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.
- The individual child must be a Canadian resident.
- Must have a valid Social Insurance Number.
- Must have a RESP account in the child’s name.
- A request must be made to the government for the matching contributions.
While the grant is intended to begin by age 15 or before, 16- or 17-year-old children can also receive CESG matching if one of the following two requirements are met:
- A RESP has been opened with contributions of $2,000 before December 31 of the calendar year the child turned 15 with no money withdrawn.
- A RESP has been opened with at least annual contributions of $100 made to the RESP in at least four individual years before December 31 of the year the child turned 15 with no money withdrawn.