The Canada Education Savings Grant (CESG) is free money that the Government adds to a child’s Registered Education Savings Plan (RESP) to help make their post-secondary education more affordable.
The Additional CESG (A-CESG) is money provided by the Canadian Government to children that come from low-income and middle-income families and is added to the child’s RESP to help them receive the maximum grant amount.
The A-CESG grant money is in addition to any money they receive through the Basic CESG program. Through the basic CESG, the Canadian government will match 20% of any RESP contributions, up to an annual maximum of $500. The lifetime maximum of the Basic CESG and the A-CESG is $7,200 total.
With the basic CESG, it doesn’t matter how much a family earns. You still qualify for the 20% basic CESG. But the government offers additional grants based on family income. In fact, many middle- and lower-income families are not even aware that they are eligible for the additional grant money.
The income levels for the A-CESG apply to the primary caregiver of the child and not the person who opens the account.2 Like the Basic CESG, any money received from the A-CESG can be used after high school to help pay for either full-time or part-time studies in an accredited apprenticeship program, CEGEP, trade school, college, or university.
There are two different income levels that qualify for the A-CESG. Depending on the family’s income, the beneficiary could receive an extra 10% or 20% on every dollar of the first $500.00 contributed to the RESP annually.
A family with a net income of $45,282 or less is eligible for an extra 20% grant on the first $500.00 of annual contributions, for a total of $100.00 per year. When combined with the basic CESG, this adds $600.00 in annual contributions to the RESP.
Families with a net income between $45,282 and $90,563 are eligible for an extra 10% grant on the first $500.00 of contributions each year for a total of $50.00. When combined with the basic CESG, a child you receive $550.00 annually.
Children in care, such as foster care, automatically qualify for the annual $100.00 amount. Net family incomes are updated annually. This example is based on 2016 income levels.
To qualify for the A-CESG, an RESP must be opened in the child’s name. An RESP is a savings plan set up by the Government of Canada that helps you save, tax free, for a child’s post-secondary education. Though this education savings plan, you can contribute $2,500 annually. The maximum amount you can ever contribute to any single RESP is $50,000.
GRESP is one of the fastest-growing companies in the RESP industry and helps tens of thousands of Canadians maximize their RESP grant money.
In addition to providing flexibility and a wide range of investment opportunities, GRESP also has one of the lowest administrative fees in the market and no minimum plan contributions. To learn more about opening an RESP and applying for the basic and additional CESG, talk to a Global RESP Corporation Dealing Representative in your area. Or fill out a form and a Global RESP Corporation Dealing Representative will contact you.
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