Education Insurance

Education Insurance

The Canadian government is committed to making life easy for students and parents through the Canada Education Saving Grant (CEGS). The government provides funds to the Registered Education Savings Plan (RESP) through this grant. This money can help fund the future education of a child after they have completed high school.  RESP helps fund full-time and part-time studies such as:

  • Apprenticeship Programs
  • CEGEPs (General or Vocational College in Quebec)
  • Trade schools
  • Colleges
  • Universities

A child can get a maximum of CAD 7200 in CESG.

Anyone can open an RESP, and they can make contributions. That responsibility is not limited to the child’s parents.

Eligibility

For The Basic CESG

  • The child must be a resident of Canada
  • They must provide a valid Social Insurance Number (SIN)
  • They must be named in a Registered Education Savings Plan (RESP) as a beneficiary

For The Additional Amount of CESG

An additional amount of CESG is available for children from low and middle-income families. The eligibility depends on the adjusted income level of the primary caregiver. The levels are updated annually.

For Children Aged 16 Or 17

Children of 16 or 17 years can be eligible to get the CESG if they meet at least one of the following conditions before they turn 15:

A sum of at least CAD 2,000 is contributed to the RESP. There should be no withdrawals.

  • A minimum of CAD 100 is contributed annually to the RESP in any of the four previous years

How Much Can A Child Get?

The CESG provides a maximum of 20 percent of the RESP every year, with a maximum amount fixed at $2500. A maximum of CAD 500 can be added to the RESP every year. Children from lower and middle-class families can get an additional CEGS. An extra 10 percent to 20 percent can be added to the RESP every year in such cases. The maximum amount available to the child annually in such instances is CAD 7200, including the additional amount.

How To Apply

These are the steps you must follow to complete the application:

  • You will need the Social Insurance Number (SIN) of the child and the subscriber. If the subscriber is not the primary caregiver, you will need their SIN.
  • Open an RESP and make a contribution. You may have to pay a service/administration fee but the same is not applicable to CESG which is based on the total contributions made to an RESP.
  • The next step is to complete the application form. You must take the assistance of the RESP promoter, who will provide the CESG form.
  • Next, check if the grant amount is deposited.

After Applying:

The length of time taken to process the application will depend on the accuracy of the details provided. Any information gaps may result in delays in processing.

The child can qualify for CAD 500 in CESG if they live in Canada and are born after 1998. Under specific circumstances, they can get more than CAD 500 of CESG per year to a maximum of CAD 1000. The subscriber can carry forward unused amounts from the CESG by contributing more than 2500 annually.

All CESG payments are made on a first-come, first-served basis. If two subscribers make contributions in the same month to different RESPs, the one in which the subscriber contributed early will get the CESG. It will be split proportionately if the CESG contributions are made on the same day.

If the child does not go for higher education after completing high school, the RESP shall stay open to the 35th year (or 40th year for some plan). Generally, the fund must be utilized, and the RESP closed before or on the 35th year of the plan.

If the child does not continue pursuing education post-high school, the RESP is closed. Any amount contributed to the RESP goes back to the subscriber while the Canada Learning Bond and the CESG return to the government. The interest accumulated is paid to the subscriber or transferred to a retirement savings plan or the child’s disability savings plan. It may also be gifted to any designated academic institute.

If you want more information about Education Insurance in Canada, contact Dev Immigration Services. We have many years of experience in this field and can help you understand the processes.

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