How to Boost RESP Savings with the Canadian Education Savings Grant (CESG)
The government of Canada has a couple of programs in place to help families save for the high cost of post-secondary education. One of these programs is the Canada Education Savings Grant (CESG).
What is the CESG?
The CESG is a program run by Employment and Social Development Canada that helps families save for a child’s post-secondary education. It’s an incentive-based program in which the government contributes to a child’s Registered Education Savings Plan (RESP) based on the amount that the family contributes.
How does the CESG work?
As mentioned above, the CESG is a grant that is awarded when contributions are made to a child’s RESP account. No matter their household income, every Canadian child is eligible to receive at least the basic CESG, which is 20% of annual contributions made to all eligible RESPs in their name.
That money can then help pay for the child’s education after high school. Studies can be full-time or part-time, and the money is valid for the cost of attending:
University
College
Trade school
Apprenticeship programs
CEGEPs (general or vocational college in Quebec)
Note that the child must attend a recognized educational institution.
» MORE: How to set up a student bank account
How much can I receive?
The basic CESG is 20% of the RESP contributions each year, up to a maximum of $500 per year. If your child has room left over from previous years, it will be carried forward. In this case, the maximum CESG they can receive per year is $1,000, based on contributions.
If your child qualifies for the additional CESG, an extra $50 or $100 will be added to the basic amount, depending on your adjusted family income.
The maximum lifetime amount of CESG, which includes basic and additional CESG, is $7,200 per beneficiary.
CESG eligibility
There are two types of CESG: basic and additional.
To be eligible for Basic CESG, the child must:
Be 17 years or younger.
Be a resident of Canada.
Have a valid Social Insurance Number.
Be named as a beneficiary in an RESP.
Parents, family members or friends must make contributions to the RESP before the child can receive CESG. In other words, your child can’t get the CESG if no one contributes to their RESP.
In 2024, the additional CESG may be:
Up to $100 if the family income is less than $53,359 (20% of income x the first $500 contributed to the RESP)
Up to $50 if the family’s income is between $53,360 and $106,717 (10% of income x the first $500 contributed to the RESP)
Children whose family income is more than $106,718 in 2023 are not eligible for the additional CESG in 2024 (though they are still eligible for the basic CESG).
CESG eligibility for 16- and 17-year olds
The CESG is meant as a long-term saving strategy, so additional rules apply for children who are 16 or 17 years old. To qualify for the grant, you need to have contributed to your child’s RESP before Dec. 31 of the year in which they turned 15.
Your child is eligible for the CESG if you meet one of these criteria:
You contributed at least $2,000 to the child’s RESP before the end of the calendar year in which they turned 15. The money cannot have been withdrawn.
You contributed at least $100 per year to the RESP in any four years before the end of the calendar year in which the child turned 15. The money cannot have been withdrawn.
If you made either type of contribution before the end of the year when your child turned 15, they are eligible to receive the CESG at ages 16 and 17.
» MORE: Are you eligible for the Canada Learning Bond?
How to apply for the CESG
Gather the necessary information, including the child’s SIN and your own.
Open an RESP for the child (if you haven’t yet) and contribute to it.
Complete the CESG application form, which you can get from your RESP provider. As the individual applying for the CESG, you are considered to be the subscriber. However, if you are not the child’s primary caregiver or are the cohabiting common-law partner or spouse of the primary caregiver, you will have to have the primary caregiver sign an Annex B form to include with the documents.
Wait for your grant to be deposited. Once you’re approved, the CESG (and the Additional CESG, if you qualify) will be deposited into the RESP. Typically you’ll see the CESG about four to six weeks after making your contribution.
» MORE: How to set up direct deposit
Frequently asked questions
What happens to the grant if the RESP fund is not used?
What happens to the grant if the RESP fund is not used?
If the child does not use their RESP to pursue post-secondary education, the RESP may be closed or transferred into the parent’s Registered Retirement Savings Plan (RRSP). However, since the CESG is only for educational expenses, this money will be returned to the government.
How often is CESG paid?
How often is CESG paid?
CESG is paid after you make your contribution, based on the contribution amount. If you make one contribution each year, you’ll receive one CESG payment per year, up to 65 days after you make the contribution. If you make multiple contributions on a different schedule, such as monthly, your CESG payments will reflect that timing. Check with your RESP about any conditions related to contribution timing.
Is CESG taxable income?
Is CESG taxable income?
Yes, when your child withdraws these RESP contributions, including CESG money, they’ll be taxed on that income. However, since they’ll be a student, they likely won’t be earning much other income and therefore will pay little or no tax on this money.
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Hannah Logan
Siddhi Bagwe