No matter where in Canada you live, parents want their kids to get the best education and to not be burdened with debt when they graduate. The best way to set your kids up to succeed in their post-secondary education is by opening a Registered Education Savings Plan (RESP) as soon as possible and contributing to it regularly.
An RESP allows a parent, relative, for family friend to save for a child’s post-secondary education tax-free. Through the RESP you can contribute $2,500 annually up to a maximum of $50,000. On top of that, through the Canada Education Savings Grant (CESG), the Canadian government will match 20% of any RESP contributions until the recipient reaches the age of 17. This translates into an additional $500.00 annually to a lifetime maximum of $7,200.
In British Columbia, the provincial government understands that saving for a post-secondary education is difficult. To help families in British Columbia send their kids to college or university, the provincial government introduced the British Columbia Training and Education Savings Grant (BCTESG).
The BCTESG is a one-time grant of $1,200 designed for post-secondary education and is available to children between the ages of six and nine years of age. The B.C. education grant is retroactive up to 2013, and parents are not required to make minimum contributions to receive the grant.
To be eligible for the $1,200 available through the BCTESG, some basic criteria must be met: the child must have been born in 2006 or later, you and the child must be residents of British Columbia, and the child must have an RESP opened in their name.
To prove that they are B.C. residents, the child must have a valid Social Insurance Number. The parent or guardian of the child must have one of the following: a valid B.C. driver’s licence, a British Columbia Identification Card with picture, a B.C. Services Card, or a B.C. utilities bill dated within the last three months and listing the custodial parents or legal guardians current address. A utilities bill can be an electricity, gas, phone, cable, water, or garbage bill.
To apply for a BCTESG, you will need to open an RESP first. If you haven’t opened one yet, a Dealing Representative from Global RESP Corporation (GRESP) can help. If an RESP has already been opened in the child’s name, make sure the RESP provider offers the provincial grant. If not, you will need to open another RESP at a participating provider in order to receive the grant.
Even though you can’t apply for a BCTESG until your child reaches the age of six, you can start an RESP at any point. The earliest you can apply for the grant is when the child turns six. After that, you can apply at any point before their ninth birthday.
Because the BCTESG is a new education savings plan in British Columbia, if your child had their sixth birthday in 2013, 2014, or 2015, you get an extension until August 14, 2018 or the day before their ninth birthday, whichever date is later. If your child was born in 2006, you have an extension until August 14, 2019 to get the grant.
Once the BCTESG form is completed, GRESP will submit it to the government on your behalf for secure processing. The BCTESG could appear in the RESP in as little as six weeks.
The BCTESG must be used for qualifying post-secondary education or training purposes in or outside of Canada. Once the beneficiary is enrolled in full-time or part-time studies at a qualified post-secondary education, the BCTESG is withdrawn from the RESP through an Educational Assistance Payment (EAP).
The $1,200 education savings plan grant is considered non-taxable income until it is removed from the RESP. Once removed, it is taxed as income in the hands of the student. But, since students are typically in a lower tax bracket, they will pay little or no tax.
Should the recipient choose not to attend a post-secondary education or the RESP is closed down, the BCTESG will be returned to the Province of British Columbia.
GRESP is a leading provider of RESPs in Canada. With offices in British Columbia, Alberta, Ontario, and Quebec, and hundreds of independent representatives across the country, GRESP is one of the fastest-growing companies in the RESP industry.
Moreover, GRESP is one of the few companies that administer all provincial and federal grants available. We are also the primary distributor of the Legacy Education Savings Plan and the Advanced Education Savings Plan, two scholarship plans that provide innovative planning and fee options.
We at GRESP offer additional flexibility and options to maintain your contributions compared to other scholarship dealers. We also have the lowest administrative fees in the market and no minimum plan contributions.
To learn more about opening a RESP or the BCTESG, talk to a Global RESP Corporation sales representative in your area. Or fill out a form and a Global RESP Corporation sales representative will contact you.
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