Updated May 21, 2019 | Originally published July 30, 2018
Did you know that British Columbia families could miss out on close to $5 billion in RESP grants in their children’s lifetime? That’s an average of $5,884 missed per eligible child.
An RESP or Registered Education Savings Plan is a dedicated savings plan to help you save for a child’s education after high school.
This unclaimed money is the result of low participation rates in the three main grant programs: British Columbia Training and Education Savings Grant, Canada Education Savings Grant and Canada Learning Bond.
And by the way, some of the grants don’t even require any contribution to claim them – it’s free money for your kids.
Between the three programs, BC families have the opportunity to access a significant amount of RESP grants:
- Low-income families: $10,400 per child, including $3,200 that requires no contribution to claim it
- Mid- and high-income families: $8,400 per child, including $1,200 that requires no contribution to claim it
Here’s an overview of the three grant programs.
British Columbia Training and Education Savings Grant (BCTESG)
First, the new British Columbia Training and Education Savings Grant is a one-time provincial incentive of $1,200 available to children born on or after January 1, 2006. It currently has a participation rate of only 32%. That means 68% – a whopping 225,569 kids – have not been signed up and are missing out on more than $270 million in free money for their post-secondary education.
The final deadline to sign up kids is the day before their ninth birthday. Or you can sign them up as early as their sixth birthday.
Note: a further extension was given to kids born in 2006 – their deadline to sign up is August 14, 2019. For kids born from 2007 to 2009, the deadline to apply has passed.
|Birth year||First day to apply||Last day to apply|
|2006||August 15, 2016||August 14, 2019|
|2007-2009||August 15, 2015||Deadline has passed|
|2010 or later||Child’s 6th birthday||Day before child turns 9|
Parents or guardians can apply for the grant by filling out a straightforward application at most major banks and credit unions, including Vancity. Also, you can use an existing RESP or open a new one – you just need to make sure the financial institution where you hold the RESP offers the grant.
And it’s not just parents who can open an RESP. Other family members or family friends can start an RESP if they have the necessary information to open the account that’s best for the child. For more tips like this, read 5 RESP tips every parent should know.
Canada Education Savings Grant (CESG)
Second, the Canada Education Savings Grant is a grant from the Government of Canada that adds 20% to the first $2,500 of annual RESP contributions. This means that the RESP can collect an extra $500 a year (up to a lifetime maximum of $7,200 per beneficiary) towards a child’s education.
Furthermore, the Additional Canada Education Savings Grant adds an extra 10% or 20% to the first $500 put into the RESP each year depending on the child’s primary caregiver’s net family income. Income levels are updated every year. For example, in 2018 a child is eligible for the additional amount of CESG if the adjusted family income level is $93,208 or less.
In 2015, the Canada Education Savings Grant participation rate in B.C. was 54%, with 386,527 eligible children not participating. That translates to $299 million in unclaimed Canada Education Savings Grants in 2015 and a projected $4.3 billion over the eligible children’s lifetime.
Parents can apply for the grant through a participating financial institution.
Canada Learning Bond (CLB)
Third, the Canada Learning Bond offers a $500 RESP contribution to children from low-income families, plus an additional $100 every year until age 15, up to a maximum of $2,000.
With a 2015 participation rate of 38%, that means 179,019 eligible children in B.C. are not currently benefitting from the program. That translates to $90 million in unclaimed Canada Learning Bond grants in 2015 and a projected $358 million over the eligible children’s lifetime.
Parents can use the SmartSAVER Start My RESP application to start their application for an RESP and the Canada Learning Bond online, or apply directly through a participating financial institution.
We recommend that you talk to your financial institution to get more specific advice. You can talk to a wealth management professional at Vancity about options relating to your situation. Not a Vancity member? Open an account today.
Unclaimed BCTESG amount calculated based on data from BC Ministry of Education; unclaimed CESG and CLB amounts calculated based on data from 2015 Canada Education Savings Program Statistical Review (also see Vancity’s report Earning While Learning).