CESP - RESP Provider User Guide Introduction

Disclaimer: RESP promoters

The information contained on this page is technical in nature and is intended for Registered Education Savings Plan (RESP) and Canada Education Savings Program promoters. For general information, visit the RESP section.

Chapter 1-1: ESDC's Education Savings Incentives Program

Employment and Social Development Canada (ESDC) is responsible for the administration and delivery of a number of education savings incentives available to eligible beneficiaries of Registered Education Savings Plans (RESPs). Within ESDC, the Canada Education Savings Program (CESP) provides the delivery mechanism and necessary system supports for the effective administration of the following education incentives:

  • Canada Education Savings Grant (CESG)
  • Canada Learning Bond (CLB)
  • Alberta Centennial Education Savings Plan Grants (Alberta Grants)
  • Saskatchewan Advantage Grant for Education Savings (SAGES)

This chapter provides an at-a-glance overview of each of these incentives. It also outlines the roles and responsibilities of the individuals and organizations that facilitate and participate in the process associated with each incentive.

See Appendix C for a list of acronyms and terms used in this guide.

1. The Education Savings Incentives

The purpose of education savings incentives is to encourage families to plan and save for their children's post-secondary education while the children are young. By getting an early start in making contributions to an RESP and applying for the incentives for which children qualify, families can take full advantage of these incentives.

The federal education savings incentives administered by CESP include:

  • CESG
  • CLB

The Canada Education Savings Act authorizes the payment of CESG and CLB.

An RESP can also include provincial incentives paid from designated provincial programs. Payments made into an RESP through a designated provincial program are treated the same way as federal grants or bonds and do not attract federal grants or bonds themselves. These payments are not considered to be contributions to an RESP.

The Alberta Grants are provincial incentives paid under a designated provincial program. CESP administers this incentive through an agreement between ESDC and the Government of Alberta.

The SAGES is a provincial incentive paid under a designated provincial program. CESP administers this incentive through an agreement between ESDC and the Government of Saskatchewan.

The Quebec Education Savings Incentive (QESI) is a provincial incentive paid under a designated provincial program established under Quebec legislation. CESP does not administer this provincial incentive.

As contributions and savings incentives are deposited to the RESP over time, earnings in the plan are not taxable until they can be used to offset the cost of a child's post-secondary education.

1.1. The CESG At-a-Glance

CESG consists of Basic CESG rates (introduced in 1998) and Additional CESG rates (introduced in 2005) on RESP contributions made in respect of eligible beneficiaries.

CESP pays the following in respect of an eligible beneficiary:

  • Basic CESG rate of 20% on contributions made to an RESP in respect of a beneficiary. The amount of annual Basic CESG payable per beneficiary is limited to the lesser of the following amounts:
    • accumulated grant room available for the beneficiary
    • Basic CESG annual limit per beneficiary
  • Additional CESG rate of 10% or 20% on the first $500 or less of RESP contributions made in respect of a beneficiary, based on the adjusted family net income of the beneficiary's primary caregiver (PCG)
Eligibility for the Additional CESG Rates

Additional CESG rates are based on the primary caregiver's adjusted family net income:

  • Additional 10%: Adjusted family net income is more than $43,953* but not more than $87,907*
  • Additional 20%: Adjusted family net income is $43,953* or less or the child is in the care of an Agency which receives payments under the Children's Special Allowances Act (CSA)

*These figures are based on 2014 income levels; income levels are indexed yearly.

Through an information sharing process, the Canada Revenue Agency (CRA) confirms to CESP those beneficiaries eligible to receive the Additional 10% and 20% CESG rates, based on their primary caregiver's adjusted family net income.

To learn more about CESG eligibility criteria, information requirements, program-related rules, and application processes, see Chapter 2-1: The Basic Canada Education Savings Grant (CESG) or Chapter 2-2: The Basic and Additional Canada Education Savings Grant (CESG)

1.1.1. Grant Room and Carry Forward

As of 1998, grant room (unused Basic CESG amounts) accumulates for a child until the end of the year in which the child turns 17, even if the child is not a beneficiary of an RESP. Unused Basic CESG amounts can be carried forward for possible use in future years.

  • 1998 to 2006: $400 is added to the grant room for each eligible child per year since 1998 (or since birth if the child was born after 1998).
  • Since 2007: $500 is added to the grant room for each eligible child per year since 2007 (or since birth if the child was born after 2007).

A decision to pay Additional CESG is made yearly, based on applicable income information at that time. Consequently, Additional CESG amounts cannot be carried forward to the following year. However, grant room is not affected by Additional CESG payments made to an RESP in respect of a beneficiary.

1.2. The CLB At-a-Glance

The CLB is available for each child, born in 2004 or later, whose primary caregiver is eligible for the National Child Benefit Supplement (NCBS), or for payments under the Children's Special Allowances Act (CSAA) (for children in care).

The CLB is an entitlement directed to a specific child and consists of two types of payments:

  • initial CLB of $500 for the first year a child's primary caregiver qualifies for and receives the NCBS or a payment under the CSAA.
  • subsequent CLB of $100 for each year that the child's primary caregiver is entitled to and receives the NCBS or a payment under the Children's Special Allowances Act, up to and including the year the child turns 15.

CRA assesses a family's eligibility for the NCBS each year. Therefore, eligibility for the CLB may change from year to year, depending on whether or not the primary caregiver continues to qualify for and receive the NCBS. For more information, visit the National Child Benefit Web site.

Accumulated CLB entitlements can be requested up to the eligible child's 21st birthday. After that, all accumulated CLB entitlements will be forfeited.

CLB Entitlements Tracked by ESDC

ESDC will keep track of CLB entitlements as they accumulate for each child, even when the child has not been named as the beneficiary of an RESP.

The CLB does not depend on contributions made to the RESP. However, a subscriber must open an RESP and name a child as a beneficiary before CLB entitlements can be paid.

To learn more about CLB eligibility criteria, information requirements, program-related rules, and application processes, see Chapter 2-3: The Canada Learning Bond (CLB)

1.3. The Alberta Grants At-a-Glance

The Alberta Grants are available for children whose parent(s) or legal guardian(s) is a resident of Alberta. The Alberta Grants consist of two types of payments:

  • one Alberta Grant Payment of $500 for children born in 2005 or later. Application for this grant must be made within a specified time.
  • three Alberta Grant Payments of $100 each for eligible children at the age of 8, 11 or 14 years on or after January 1, 2005. Application for each of these three grants must be made within a specified time.

To learn more eligibility criteria for Alberta Grants, information requirements, program-related rules, and application processes and timelines, see Chapter 2-4: The Alberta Centennial Education Savings Plan Grants (Alberta Grants)

1.4. SAGES At-a-Glance

The SAGES is available for RESP contributions made on or after in respect of beneficiaries who are residents of Saskatchewan.

Saskatchewan matches 10% of RESP contributions in SAGES amounts, up to $250 per beneficiary for each eligible year, until the end of the calendar year in which the beneficiary turns 17. Total SAGES payments per beneficiary could reach $4,500 if the beneficiary is eligible from birth until age 17.

While each eligible beneficiary's SAGES grant room increases by $250 per eligible year, the annual SAGES amount that can be paid per beneficiary is limited to the lesser of the following two amounts:

  • accumulated SAGES grant room for the beneficiary
  • SAGES annual limit of $500.

To learn more about SAGES eligibility criteria, information requirements, program-related rules, and application processes and timelines, see Chapter 2-5: Saskatchewan Advantage Grant for Education Savings (SAGES).

2. An Overview of Roles and Responsibilities

To administer the payment of education savings incentives, CESP partners with:

  • RESP promoters
  • CRA
  • Social Insurance Registry (SIR)
  • Government of Alberta
  • Government of Saskatchewan

Each organization shares information and manages processes that enable CESP to deposit the education savings incentives into an RESP in respect of an eligible beneficiary.

The subscriber and the child's parent(s), primary caregiver, or legal guardian, each plays a key role.

The following pages provide an overview of their respective roles and responsibilities, starting with the subscriber.

2.1. The Subscriber

In order for a beneficiary to receive any of the education savings incentives, the subscriber must meet with a participating RESP promoter and:

  • open an Education Savings Plan (ESP), name a beneficiary, and request that the ESP be registered with CRA via CESP.

    Note:  To receive the Additional CESG and/or the CLB, the ESP must be an individual (non-family) plan, or a family plan in which all beneficiaries are siblings, and it must be registered by CRA.

  • ensure the beneficiary meets all eligibility criteria for the incentive(s)
  • make contributions to the RESP that do not exceed limits.

    Note: Payment of the CLB and the Alberta $500 Grant do not depend on contributions. However, the deposit of contributions is a pre-requisite for the CESG, the Alberta $100 Grants and SAGES.

  • apply for the incentive(s) in respect of an eligible beneficiary by completing the appropriate application form. See Appendix A: Application Forms – Education Savings Incentives
Information Required from the Subscriber

To register the ESP, the subscriber must present the RESP promoter with the following information:

In all cases:

  • The subscriber's Social Insurance Number (SIN)
  • The beneficiary's SIN, name, and date of birth

If applying for the Additional CESG and/or the CLB:

  • The primary caregiver's SIN or the Business Number (BN) of the agency responsible for a child in care

The subscriber is responsible for informing the RESP promoter of any changes to beneficiary information (e.g. change of residency).

2.2. Parent, Legal Guardian, or Primary Caregiver

Payment of the incentives administered by the CESP requires the beneficiary's SIN.

As a first step, the parent, legal guardian, or primary caregiver must:

  • obtain a copy of the child's birth certificate
  • apply for and obtain a SIN for the child

To apply for the Additional CESG and/or the CLB, primary caregivers must:

  • provide their SIN
  • designate the RESP into which CLB payments should be deposited

Note: By completing and signing the application form, the primary caregiver is providing their consent to income verification by CRA and also designates that plan to receive CLB, if applicable. For more information, see Appendix A: Application Forms – Education Savings Incentives.

For Alberta Grants, the parent or legal guardian must complete and sign the Application for Alberta Centennial Education Savings Plan Grants. For SAGES, the subscriber and the parent or legal guardian (if applicable) must complete and sign the Application for Saskatchewan Advantage Grant for Education Savings.

2.3. The RESP Promoter

Throughout the RESP life cycle, the RESP promoter is responsible for managing the information and transactional processes associated with the RESP and education savings incentives requirements.

These responsibilities include the following:

  • Enroll with CRA as an RESP promoter. During this process, RESP promoters will submit proposed Specimen Plans to CRA. Upon approval, they will receive a specimen number for each plan.
  • Enroll with ESDC as a participating RESP promoter. This requires the RESP promoter and their trustee to:
    • enter into a formal agreement with ESDC in order to offer the applicable education savings incentives
    • undergo and pass industry systems testing to ensure compliance with CESP system requirements

For more information about the enrollment process contact CESP.

Once recognized as a participating RESP promoter, promoters can assist their clients in opening RESPs so that eligible beneficiaries can benefit from the education savings incentives administered by CESP.

The RESP promoter is responsible for:

  • collecting from the subscriber the information required to open and register an ESP and to apply for the education savings incentive(s). This information must be protected according to federal and provincial privacy requirements. See 3. Federal and Provincial Privacy Requirements, later in this chapter;
  • registering ESPs with CRA via CESP;
  • assisting subscribers in applying for the applicable education savings incentives in respect of eligible beneficiaries;
  • submitting contract and financial information to CESP. This information includes RESP and incentive-related data and is submitted to CESP electronically, according to a specified format. See Chapter 1-3: The CESP System and Interface Transaction Standards (ITS);
  • ensuring contributions (assisted and unassisted), earnings, CESG, CLB and provincial incentives (such as Alberta Grants, SAGES and the Quebec Education Savings Incentive) are tracked using separate RESP accounts in an RESP;
  • advising the subscriber when incentive payments are received or if repayments are required;
  • transferring funds to another RESP based on direction from the subscriber. This may include collaborating and communicating with other RESP promoters;
  • maintaining a record of all RESP transactions. This information, which must be reported electronically to CESP, includes all:
    • contributions
    • withdrawals
    • EAPs
    • transfers
    • other transactions
  • receiving requests for EAPs from the subscriber or beneficiary, and verifying the beneficiary's eligibility for such payments;
  • making EAPs and calculating the portion of the EAP attributable to each incentive. See Chapter 3-2: Post-Secondary Education and Educational Assistance Payments; and
  • advising the subscriber of potential options for distributing funds remaining in the RESP prior to terminating the RESP, including:
    • accumulated income payment (AIP);
    • rollover of RESP investment earnings into a Registered Disability Savings Plan (RDSP);
    • direct contributions of accumulated earnings to the Registered Retirement Savings Plan (RRSP) of the subscriber or the subscriber's spousal RRSP; or
    • payment to a designated post-secondary educational institution. See Chapter 3-3: Options for Assets Remaining in the RESP.
    Unless otherwise specified, the procedures associated with each of the above responsibilities are included in Section 2: Education Savings Incentives.

2.4. Employment and Social Development Canada

ESDC is responsible for the administration and delivery of a number of education savings incentives available to eligible beneficiaries of RESPs. Within ESDC, the CESP provides the delivery mechanism and necessary system supports for the effective administration of these incentives. The CESP:

  • receives the contract, beneficiary, and subscriber information needed to register ESP contracts, verifies this information, and communicates the request to register the ESP with CRA;
  • administers the education savings incentives authorized by the Canada Education Savings Act. This includes the CESG and the CLB;
  • determines eligibility for the Additional CESG and for the CLB, based on information pertaining to the beneficiary's primary caregiver. This information is obtained through an information-sharing process with CRA;
  • processes payments of Alberta Grants in collaboration with the Government of Alberta;
  • processes SAGES payments in collaboration with the Government of Saskatchewan; and
  • receives and processes transactions submitted to the CESP system. This includes information associated with:
    • the RESP contract;
    • the beneficiary and subscriber; and
    • various financial transactions.

The procedures within this guide outline how CESP interacts with the RESP provider in each of these circumstances.

2.5. Canada Revenue Agency

The effective administration of CESP depends on the collaborative partnership with CRA.

CRA is responsible for:

  • administering the registration of ESPs according to the requirements set out under the Income Tax Act (ITA)
  • sharing information for the purposes of confirming a beneficiary's eligibility for the Additional CESG and the CLB with the CESP

    For the purposes of the Additional CESG, CRA confirms eligibility based on the primary caregiver's adjusted family net income. See Chapter 2-2: The Basic and Additional Canada Education Savings Grant (CESG)

    For the purposes of the CLB, CRA confirms the primary caregiver's eligibility for the National Child Benefit Supplement (NCBS). See Chapter 2-3: The Canada Learning Bond (CLB)
  • confirming a beneficiary is a child in care of an agency receiving payments under the CSAA

2.6. Alberta Government

The Government of Alberta:

  • funds the Alberta Grants program
  • collaborates / cooperates with ESDC to deliver this initiative

Within ESDC, CESP utilizes the CESP system and the existing program framework to administer and deliver Alberta Grants on behalf of the province of Alberta.

See Chapter 2-4: The Alberta Centennial Education Savings Plan Grants (Alberta Grants).

2.7. Saskatchewan Government

The Government of Saskatchewan:

  • funds the SAGES program; and
  • collaborates / cooperates with ESDC to deliver this initiative.

Within ESDC, CESP utilizes the CESP system and the existing program framework to administer and deliver SAGES on behalf of the province of Saskatchewan.

See Chapter 2-5: Saskatchewan Advantage Grant for Education Savings (SAGES).

3. Federal and Provincial Privacy Requirements

Certain eligibility criteria associated with the RESP and education savings incentives, require the RESP promoter to collect or verify information provided by the subscriber and a child's parent, legal guardian, or primary caregiver when applying for a particular education savings incentive.

For example:

  • When opening an RESP, subscribers must provide their SIN, as well as the beneficiary's SIN. All applications for ESDC education savings incentives require the SIN for the beneficiary, the subscriber, and in some cases the child's primary caregiver.
  • The application for an Alberta Grants requires proof that a parent or guardian is a resident of the province of Alberta, such as a valid Alberta Driver's License, valid Alberta Health Insurance Card, or utility bills for proof of address.

RESP promoters can assure their clients that any information provided during the RESP and incentive application process will respect the client's privacy in compliance with federal and provincial privacy legislation.

Federal and provincial privacy legislation stipulate how organizations in the private sector must manage the collection, storage and use of personal information. Therefore, when assisting clients to apply for any of the above incentives, it is important to be aware of and understand the privacy legislation in place in each jurisdiction. These are summarized below.

3.1. Federal Privacy Legislation

Canada has two federal privacy laws:

  • Privacy Act
  • Personal Information Protection and Electronic Documents Act (PIPEDA)

The Privacy Act gives all individuals present in Canada access to federal information about themselves, and specifies how the government can collect, use, disclose, and retain personal information. It requires that government institutions develop and maintain an index of personal information holdings called Personal Information Banks (PIBs).

The index is a means of organizing information for the purpose of public access and ensures that PIBs are registered, approved, and identified in InfoSource.

The Act provides the legal framework for protecting personal information, accessing personal information, data-matching, and controlling the use of SINs. For more information about the Privacy Act, visit the web site for the Office of the Privacy Commissioner of Canada.

The PIPEDA is federal legislation that protects personal information. PIPEDA sets out principles that organizations, individuals, associations, partnerships, and trade unions must follow when collecting, using, and disclosing personal information in the course of a commercial activity.

PIPEDA applies to the commercial activities of the federally regulated private sector (such as banks), the retail sector, publishing companies, the service industry, manufacturers, and other provincially regulated organizations.

For more information about PIPEDA, visit the web site for the Office of the Privacy Commissioner of Canada.

The federal government may exempt organizations or activities in provinces that have their own privacy laws if they are substantially similar to the federal law. PIPEDA will continue to apply in those provinces to the federally regulated private sector and to personal information in inter-provincial and international transactions by all organizations engaged in commercial activities.

Oversight of both federal Acts rests with the Privacy Commissioner of Canada who is authorized to receive and investigate complaints.

3.2. Provincial Privacy Legislation

The province of Alberta has its own privacy legislation:

  • The Personal Information Protection Act (PIPA)

The PIPA also governs the collection, use, and disclosure of personal information by businesses and other organizations. It provides individuals with a general right of access to, and correction of, their personal information.

For more information about PIPA, visit the web site for the Office of the Information and Privacy Commissioner of Alberta.

The province of Saskatchewan has its own privacy legislation:

  • The Freedom of Information and Protection of Privacy Act (FOIP).

The FOIP governs the collection, use, and disclosure of personal information by a government institution. It provides individuals with a general right of access to, and correction of, their personal information.

For more information about FOIP, visit the web site for the Office of the Information and Privacy Commissioner of Saskatchewan.

4. The CESP Process – An Overview

The incentive application and payment process involves the following steps:

  1. Open Education Savings Plan (ESP) and have it Registered (RESP)*
    (See section 1, Chapter 1-4: Registered Education Savings Plans (RESPs))
  2. Assist subscriber in reviewing the beneficiary's eligibility for the education savings incentive(s)
  3. Complete the appropriate application form(s) and apply for the incentive(s)*
    (See section 2, Education Savings Incentives, and Appendix A: Application Forms – Education Savings Incentives)
  4. Facilitate any transfers between RESPs
    (See section 3, Chapter 3-1: RESP Transfers and the Education Savings Incentives)
  5. Receive, deposit, track incentive payments in RESP accounts
  6. Submit repayment of incentive(s) if required*
  7. Make EAPs to eligible beneficiaries attending post-secondary education*
    (See section 3, Chapter 3-2: Post-Secondary Education and Educational Assistance Payments (EAPs))
  8. Assist subscriber in distributing remaining RESP earnings
    (See section 3, Chapter 3-3: Options for Assets Remaining in the RESP)

* Requires the submission of electronic transactions to the CESP via the CESP System. For more information about submitting these transactions, see Chapter 1-3: The CESP system and Interface Transaction Standards (ITS).

Chapter 1-2: Key Concepts

There are a number of legislative and program elements that govern the delivery and administration of the education savings incentives administered by the Canada Education Savings Program (CESP), Employment and Social Development Canada (ESDC). Throughout this guide, these elements are referred to as “key concepts”.

Unless otherwise indicated, the key concepts in this chapter apply to all incentives. To view concepts that are unique to a particular incentive, refer to the related chapter in Section 2: Education Savings Incentives. Relevant key concepts appear immediately following the corresponding eligibility criteria.

An understanding of these concepts and requirements will allow Registered Education Savings Plan (RESP) promoters to assist the subscriber to apply for and receive the incentive(s) for which they qualify.

See Appendix C for a list of acronyms and terms used in this guide.

1. Legislative Authorities – ESDC and CRA

ESDC and the Canada Revenue Agency (CRA) work together in administering the education savings incentives and RESPs. They do so under the following legislative authorities:

  • The Income Tax Act (ITA) governs RESPs – the vehicle used to deposit education savings incentives and save for the beneficiary's post-secondary education.
  • The Canada Education Savings Act (CESA) authorizes payment of the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB).
  • The Canada Education Savings Regulations determine eligibility for the CESG and the CLB.
  • The Alberta Centennial Education Savings Plan Act authorizes eligibility for and payment of the initial and subsequent Alberta Grants.
  • The Saskatchewan Advantage Grant for Education Savings Act authorizes eligibility for and payment of the Saskatchewan Advantage Grant for Education Savings (SAGES).

2. RESPs

The subscriber initiates the incentive application process by entering into an Education Savings Plan (ESP) with an RESP promoter and requesting the ESP to be registered with CRA. Once successfully registered, it becomes an RESP. The RESP then becomes the repository for contributions, incentive payments, and accumulated earnings. See Chapter 1-4: Registered Education Savings Plans (RESPs).

Certain incentives may have particular RESP-related requirements. Such requirements are addressed within the related incentive chapters in Section 2: Education Savings Incentives.

3. RESP Contribution Limits

From 1998 to 2006, the ITA limited RESP annual contributions to a maximum of $4,000 and lifetime contributions to a maximum of $42,000 per beneficiary. For 2007 and future years, there is no longer an annual contribution limit and the lifetime contribution limit is $50,000 per beneficiary.

The payment of incentives is not included when calculating total RESP contribution limits. For example (contributions made prior to 2007):

  • If contributions paid into an RESP = $4,000
  • And if the Basic CESG paid into the RESP = $ 400
  • And the total in the RESP = $4,400

The annual RESP contribution limit of $4,000 would not have been exceeded. See Chapter 1-4: Registered Education Savings Plans (RESPs).

4. Social Insurance Number

The Social Insurance Number (SIN) is a key information element used by the CESP system. See Chapter 1-3: The CESP System and Interface Transaction Standards (ITS).

A SIN is also needed for both the subscriber and beneficiary in order to establish and register an ESP.

The Additional CESG and CLB require additional SIN information from the primary caregiver. When applying for incentives, verify SIN requirements outlined with the individual incentive chapters in Section 2: Education Savings Incentives.

5. The Beneficiary's SIN – A Unique Identifier

The beneficiary's SIN is used by the CESP system to:

  • Provide CRA with registration information about the plan.
  • Track RESP contributions and incentive payments for the beneficiary.
  • Determine when the beneficiary's annual and lifetime RESP limits have been reached.
  • Determine when the beneficiary's incentive limits have been reached.

The beneficiary's SIN is subject to rigorous validation checks. It is critical to verify the accuracy of the beneficiary's SIN when completing the RESP process and applying for incentives. An inaccurate SIN will delay ESP registration as well as payment of the incentives. (See box below.)

Accurate Information Ensures Incentive Requests Can be Processed

The beneficiary must be established in the CESP system before a request for an incentive can be processed. To do this, the beneficiary's SIN is compared and validated against five key data elements held in the Social Insurance Registry (SIR):

  • first name
  • last name
  • date of birth
  • SIN
  • sex

When applying for the incentives, the RESP promoter must submit beneficiary information that matches the data held at SIR. Otherwise, an error report will be sent to the RESP promoter, identifying the field(s) in error. Until the correction is made and resubmitted to the CESP system, payment of the incentives will be delayed. See Chapter 1-3: The CESP System and Interface Transaction Standards (ITS).

5.1. Applying for a SIN

The SIN application form, along with instructions, can be obtained from a Service Canada office.

6. RESP Accounts and the Education Savings Incentives

An RESP is comprised of the following RESP accounts:

  • assisted Contributions made to the RESP by the subscriber
  • unassisted Contributions made to the RESP by the subscriber
  • CESG
  • CLB – maintained separately for each beneficiary
  • provincial incentives - accounts maintained separately for each designated provincial program
  • earnings

RESP promoters must track financial transactions within these RESP accounts for each beneficiary and for each plan.

When a financial transaction is processed in respect of the beneficiary, funds are deposited into or withdrawn from the appropriate account depending on the nature of the financial transaction.

For example, contributions are deposited into the contribution account; incentives are deposited into the related incentive account (e.g. the CESG is deposited into the CESG account, the Alberta Grants are deposited into the Alberta Grants account etc.)

For incentives administered by CESP, the CESP system tracks these various activities, by beneficiary, to ensure incentive limits are not exceeded. Also, should all or a portion of an incentive have to be repaid, the amount will ultimately be withdrawn (repaid) from the RESP account for that incentive.

Requirements for reporting RESP transactions to the CESP are specified in the CESP Interface Transaction Standards (ITS) which can be downloaded from the Web address.

6.1 Provincial Incentives

An RESP promoter must be able to track transactions associated with each of the designated provincial programs that the promoter delivers to the public.

For example:

  • Promoters delivering Alberta Grants have RESP accounts to track all activities associated with Alberta Grants. As the CESP administers Alberta Grants, transactions associated with Alberta Grants are reported to CESP using the Alberta Grants account.
  • Promoters delivering SAGES have RESP accounts to track all activities associated with SAGES. As the CESP administers SAGES, transactions associated with SAGES are reported to the CESP using the SAGES account.
  • Promoters delivering the Quebec Education Savings Incentive (QESI) have RESP accounts to track all activities associated with QESI. As the CESP does not administer QESI, promoters do not report, to the CESP, specific QESI amounts associated with RESP transactions.
Reporting QESI data to the CESP

Promoters must include all assets in RESPs when reporting the Fair Market Value (FMV) of an RESP in their monthly summary reports (RT 700). As such, the FMV amount should include saving incentives from all sources present in the RESP, including the QESI if applicable.

Promoters are not required to report specific QESI amounts in Educational Assistance Payment (EAP) transactions reported to the CESP. However, if there are QESI amounts in an EAP, they must be included in the total EAP Amount reported to the CESP.

7. Key Concepts Specific to Incentives

There are other important key concepts that are associated with, and unique to, each of the education savings incentives. These are defined and elaborated on within each related chapter in Section 2: Education Savings Incentives, and can be found immediately after the corresponding eligibility criteria.

Chapter 1-3: The CESP System and Interface Transaction Standards

Once the appropriate incentive application forms have been completed and signed, key information must be sent electronically to the Canada Education Savings Program (CESP) along with requests for the incentive(s) that are administered by the CESP. This is usually handled by the Registered Education Savings Plan (RESP) promoter's Head Office or by an external service provider.

The RESP promoter plays a key role in ensuring CESP receives the information it requires to:

  • Register Education Savings Plans with Canada Revenue Agency (CRA)
  • Respond to requests for the following incentives administered by Employment and Social Development Canada (ESDC):
    • Canada Education Savings Grant (CESG)
    • Canada Learning Bond (CLB)
    • Alberta Centennial Education Savings Plan Grants (Alberta Grants)
    • Saskatchewan Advantage Grant for Education Savings (SAGES)

This chapter provides an overview of the CESP system and the type of information exchanged between RESP promoters and CESP via the CESP system.

See Appendix C for a list of acronyms and terms used in this guide.

1. What is the CESP System?

The CESP system is an ESDC electronic application that supports the delivery of federal and provincial education savings incentives that are administered by the CESP.

The system enables the CESP to exchange electronic information with the following partners:

  • RESP promoters
  • Social Insurance Registry (SIR)
  • CRA
  • Designated Provincial Programs administered by ESDC
    • Government of Alberta
    • Government of Saskatchewan .

This information exchange allows ESDC to:

  • verify contract, subscriber, and beneficiary information;
  • submit requests to CRA to register Education Savings Plans (ESPs);*
  • verify primary caregiver information, as required;
  • confirm eligibility for the CESG, CLB, Alberta Grants and SAGES; and
  • track program-related transactions, including payments and repayments.

This, in turn, ensures that each eligible beneficiary receives the incentive to which they are entitled and facilitates the tracking of incentives and related limits for each beneficiary.

Information is exchanged between the CESP and the following partners:

  1. Alberta Government, Ministry of Advanced Education and Technology
    • Alberta Grant beneficiary, payment information
    • Alberta Grant monthly payment
  2. Canada Revenu Agency
    • Primary caregiver (PCG) information
    • PCG income verification / 10% or 20% rate
  3. RESP Providers
    • Contract and Financial Transactions
    • Transactions processing / Error reports / Contract registration
  4. Social Insurance registry
    • Beneficiary SINs and SIN Information
    • Beneficiary SIR results

CESP collects ESP contract information on behalf of CRA. Then, CRA communicates registration of the contract to the RESP promoter.

2. CESP System Terminology

It will be helpful to review some key terms that are used in relation to the CESP system, as they are used extensively in this chapter and referred to throughout this Guide.

Business Number (BN)
With respect to the CESP system, the BN is a 15 character alphanumeric code that identifies the RESP promoter or agent authorized to submit transactions to CESP.
Interface Transaction Standards (ITS)
The procedure for formatting and electronically submitting transactions to CESP. See 6. Interface Transaction Standards (ITS), later in this chapter.
The ITS can be downloaded from the Promoter Section.
Record Type (RT)
A data record that is exchanged between the RESP promoter's system and the CESP system.
There are a series of record types, each identifying a different type of transaction. For example, RT 400 identifies a financial transaction.
See 3. A Summary of CESP System Record and Transaction Types, below.
Transaction Type
The two-digit number following the Record Type (RT), which further categorizes the type of transaction. For example, RT 400-11 represents a financial transaction (RT 400) reporting a contribution (11).
See 3. A Summary of CESP System Record and Transaction Types, below.

3. Summary of Record and Transaction Types

The CESP system uses many different RT. The following table provides an at-a-glance summary of CESP system RT and corresponding 2-digit Transaction Types:

RT Description Transaction
Type
100 Contract Information 01
200 Beneficiary Information 03
Subscriber Information 04
400 Contributions (which include requests for Basic and Additional CESG) 11
EAP (Educational Assistance Payment) 13
PSE Contribution withdrawals 14
Transfers In 19
Incentive Repayments 21
Termination Adjustments 22
Transfers Out 23
Request for CLB Payments 24
Request for Alberta Grant Payments 25
410 SAGES Requests 30
Cancel SAGES Requests 31
511 Primary caregiver (PCG) Information 12
800 Error Reports  
850 Severe Error Reports  
900 Transaction Processing Reports  
910 Transaction Processing Reports  
920 SIN Validation Report  
950 Contract Registration Reports  

For more detailed information about RT, refer to the ITS document, available for download on the ESDC website.

4. Submitting Information to CESP

The RESP promoter will submit contract and financial transactions to CESP throughout the RESP life cycle.

The initial transactions will be submitted when a subscriber opens an ESP. At this time, transactions will request registration of the plan, verify subscriber and beneficiary information and request the CESG, CLB, Alberta Grants or SAGES.

The RESP promoter will assist the subscriber in completing the appropriate application form, which collects two categories of contract-related information:

  • information about the RESP contract itself
  • information about the subscriber and the beneficiary

Once information about the contract, the subscriber, and the beneficiary has been validated, the beneficiary can be established in the CESP system. Then the RESP promoter can submit financial transactions in respect of the beneficiary (for example, contributions and requests for the CESG, CLB, Alberta Grants or SAGES).

4.1. Submitting Contract Information

When opening the ESP the subscriber can choose to apply at that time for the incentives administered by the CESP. The incentive application forms capture information about the individuals involved in the plan. Depending on the incentive, this can include up to four individuals:

  • subscriber
  • beneficiary
  • custodial parent or legal guardian
  • primary caregiver

A completed application form will also contain the following information about the contract:

  • specimen plan number
  • contract number
4.1.1. Capturing and Submitting Contract Information

As part of the RESP promoter enrollment process, participating financial institutions offering federal and/or provincial education savings incentives, administered by the CESP, must ensure their systems can ‘communicate’ with the CESP system. See 6. Interface Transaction Standards (ITS) later in this chapter.

Once the appropriate application form has been completed and signed, the contract information is captured and prepared by the RESP promoter's system and is sent electronically to the CESP system.

To register the contract, the CESP system requires three (3) separate transactions for each ESP.

  • Transaction 1: Contract information (RT 100) (See explanations of RT above)

    This includes information such as the date the contract was opened, the contract number, the specimen plan number, the BN of the financial institution, etc.

    The RT-100 establishes the contract in the CESP system and identifies the type of plan. (Plans must be reported as individual/siblings-only to attract Additional CESG, CLB, Alberta Grants and SAGES.)

  • Transaction 2: Beneficiary information (RT 200-03) and
  • Transaction 3: Subscriber information (RT 200-04)

    The RT 200 is used to provide mandatory beneficiary information (Transaction Type 03) and subscriber information (Transaction Type 04).

Each of these three transactions must be verified and processed successfully before the contract can be sent to CRA for registration.

Upon receipt of these transactions, the CESP system will notify the RESP promoter that the transactions were received, and whether or not the information is complete and accurate. When these three transactions are successfully processed, the promoter receives a 950 record in the .reg file and the request to register the plan will be sent to CRA. Otherwise, incomplete or inaccurate transactions are returned with an Error Report (RT 800 series records). (See 3. A Summary of CESP system Record and Transaction Types, earlier in this chapter.)

Note: For more details about mandatory information required for each record and transaction type, consult the ITS, available on the ESDC web site. Some general information about the ITSis provided at the end of this chapter.

4.1.2. Accurate Information Enables Payment of the Incentives

When completing the application form for any of the education savings incentives, the RESP promoter must ensure that all information is recorded accurately, as critical information elements are submitted to the CESP system.

Inaccurate information will result in the CESP system rejecting transactions and returning an error code, and delaying payment of the CESG, CLB, Alberta Grants and SAGES. RESP promoters must then resubmit the transaction with the correct information.

Information is Validated by the CESP System

Any mandatory information missing from the contract, beneficiary, or subscriber transactions will cause the transaction to be rejected.

The CESP System will validate the SIN, given name, surname, date of birth, and sex of all beneficiaries with the SIR.

If the beneficiary fails SIR validation, the transaction will be rejected and a beneficiary account will not be established. All transactions must be corrected and resubmitted to the CESP system before financial transactions can be processed. For more information, refer to the ITS, available on the ESDC web-site.

Accurate contract, beneficiary, and subscriber information ensures:

  • the contract can be registered by CRA;
  • the beneficiary can be established in the CESP system; and
  • payment of incentives is not delayed.

Once the information is successfully processed, CESP communicates key information to CRA, requesting them to register the plan. CRA will advise the RESP promoter once the plan has been registered.

RESP promoters can then report all financial activities (transactions) pertaining to that beneficiary and related RESP(s).

Note: While contract, beneficiary and subscriber transactions must first be processed successfully, financial transactions can be submitted within the same reporting period.

4.2. Submitting Financial Information to CESP

Financial transactions (RT 400) report the movement of funds into and out of an RESP. They do not include the growth of the fund or investment activities.

Because financial transactions record a number of activities (e.g. payments, repayments, transfers, etc.), the RT 400 is flagged by a "transaction type". This further identifies the type of financial information that is being submitted to CESP. For example, an RT 400 with a transaction type of "11" (RT 400-11) represents a contribution made to an RESP that may request CESG or Additional CESG.

The following table lists the various financial transactions submitted under an RT 400, and the transaction types by which they are identified. See 3. A Summary of CESP System Record and Transaction Types, above, to view the complete table from which this information has been extrapolated.)

Summary of Financial Transactions
Financial Record Types (RT 400) Transaction Types
Contributions (for CESG) 11
Educational Assistance Payments (EAP) 13
Post-secondary education (PSE) withdrawals 14
Transfers In 19
Incentive repayments, including contract terminations 21
RESP Termination adjustments 22
Transfers Out 23
CLB requests 24
Alberta Grant requests 25

An RT 400 Record Type represents a financial transaction. The 2 digit numbers following the "400", represent the 'transaction type', which further identifies the financial transaction, e.g. RT 400-11.

Throughout this Guide, additional instructions are provided to describe the various scenarios in which financial transactions are submitted.

Note: All information submitted to the CESP system must comply with the ITS, available on the ESDC website.

4.2.1. SAGES Transactions

To request a SAGES payment for a contribution, promoters must submit a SAGES Request (RT 410-30) transaction that identifies a particular contribution transaction (RT 400-11) successfully processed by the CESP system.

To cancel a SAGES request, promoters must submit a Cancel SAGES Request (RT 410-31) transaction for a successfully processed contribution transaction (RT 400-11) on which a SAGES request had already been made. Using the Cancel SAGES Request (RT 410-31) transaction type is similar to reversing a RT 400 transaction.

The table below summarizes the SAGES Request and Cancel SAGES Request transactions.

Record Type 410 Transaction Types
SAGES Request 30
Cancel SAGES Request 31

The following transaction types may also include SAGES amounts:

  • RT 400-13 (EAPs)
  • RT 400-21 (Incentive repayments)
  • RT 400-19 (Transfers in)
  • RT 400-23 (Transfers out)
  • RT 400-22 (Termination adjustments)

4.3. Sequence of Transactions Processed by the CESP System

Before any financial transactions are processed, the RESP promoter must submit three transactions to the CESP system:

  • RT 100-01 Contract information
  • RT 200-03 Beneficiary information
  • RT 200-04 Subscriber Information

If the contract, beneficiary, and subscriber are successfully established in the CESP system, the RESP promoter may submit the following transaction(s), depending on the incentive (see note below):

  • RT 400-11 Contributions (Request for Basic and Additional CESG)
  • RT 400-24 Request for CLB
  • RT 400-25 Request for Alberta Grants
  • RT 410-30 SAGES Request
  • RT 410-31 Cancel SAGES Request
  • RT 511-12 PCG Information

Note: All transactions may be submitted at the same time; however, RT 400, RT 410 and RT 511 transactions will only be processed by the CESP system once the contract, beneficiary and subscriber transactions have been successfully processed.

Sequence of transactions processed by the CESP System.

  • RESP promoter sends contract information and financial transactions to ESDC, CESP system
  • First, contract information transactions must be successfully processed. (RT 100-1, RT 200-3, RT 200-4)
  • Then, financial transactions are processed. (RT 400-11, RT 400-24, RT 400-25, etc.)

4.4. Submitting Changes or Corrections to CESP

The CESP system accepts changes or corrections to financial transactions. This is accomplished by reversing the original transaction and submitting the correct information in a separate transaction. To submit a correction to a financial transaction (RT 400), the RESP promoter must:

  1. Submit a reversal transaction to the CESP system, referencing the original financial transaction being reversed.

    This is accomplished by cross-referencing the RESP promoter's BN and the original Transaction ID.
  2. Submit a new transaction (RT 400), with the correct information.

    A new Transaction ID must be assigned. The original Transaction ID cannot be re-used. This allows the CESP system to reverse the original transaction and process the new one.

The CESP system interprets a reversal transaction to mean that the original transaction did not occur as reported. The new transaction, with the new unique Transaction ID, allows the CESP system to process the new, corrected transaction.

Submitting a Cancel SAGES Request (RT 410-31) transaction is similar to reversing a RT 400 transaction because it results in the SAGES payment being reversed for the associated contribution. Reversing a contribution transaction (RT 400-11) for which SAGES was requested will also result in a reversal of the associated SAGES payment. For more information about SAGES transactions, see 4.2.1. SAGES Transactions.

4.4.1. Correcting Primary Caregiver Information for the CESG - RT 511

Eligibility for the Additional CESG is based on the adjusted family net income of the beneficiary’s primary caregiver. Therefore, information about the primary caregiver must accompany any requests for the Additional CESG. Any changes or corrections to primary caregiver information must be submitted to the CESP system.

Rather than reversing and re-submitting the RT 400 financial transaction which originally did not include PCG information or included incorrect PCG information, the CESP system will accept corrections via a PCG Information Transaction using RT 511, Transaction Type 12 (RT 511-12).

The RT 511-12 can be used in the following situations:

  • For RESP contributions made on or after , to provide PCG information not reported on the original RT 400-11.

    When the RT 511-12 is received, the CESP system will re-process the original transaction.
  • For transactions made on or after , to provide missing PCG information or to replace inaccurate PCG data originally reported in the RT 400-11.

    Without the correct PCG information, the beneficiary would be prevented from receiving the Additional CESG amounts. Upon receipt of the RT 511-12, the original transaction will be re-processed with the ‘new’ information.

For more information, refer to ESDC’s ITS, available on the ESDC website.

4.5. Receiving Information from CESP

The RESP promoter will receive confirmation of the status of the transactions submitted to the CESP system by way of the following RT found in various reports sent to promoters by the CESP:

  • RT 800 (found in the Error Report) advises that an error is present in a transaction. This includes notice that validation has failed or information submitted is missing, incorrect, or incorrectly formatted. The record is rejected and must be corrected and resubmitted.
  • RT 850 (found in the Severe Error Report) is used to identify severe errors and advise that the record is rejected and must be corrected and resubmitted. Severe errors can occur when:
    • transactions with the same BN and Transaction ID already exist;
    • the record type is invalid;
    • the BN is not 15 characters long; and
    • the Transaction ID has not been provided.
  • RT 900 (found in the Transaction Processing Report) is used to send the following types of notifications:
    • successfully processed transactions
      (for transactions other than RT 410-30 and RT 410-31)
    • confirmation of CESG paid on contributions
    • confirmation of CLB and Alberta Grant payments
    • refusal reasons for CESG, CLB and Alberta Grants
    • other transactions (refer to the ITS document for more details)
  • RT 910 (found in the Transaction Processing Report) is used to send the following types of notifications:
    • successfully processed SAGES transactions
      (RT 410-30 and RT 410-31)
    • confirmation of SAGES payments
    • SAGES Refusal reasons
    • other transactions (refer to the ITS document for more details)
  • RT 920 (found in the SIN Validation Report) advises promoters that a beneficiary SIN is not usable, usable and/or linked. This report is produced after the monthly validation made with SIR for all SIN's included in the CESG program database. This validation is on a monthly basis.
  • RT 950 (found in the Contract Registration Report) indicates the registration status of contracts.

More information about these Record Types is provided in ESDC's ITS, available on the ESDC website.

4.5.1. Production Processing Results Report

The Production Processing Results Report gives a breakdown of all transaction types processed and the error rate for each type.

This report is a PDF file sent in English and French.

5. An Overview of the CESP System Process

The following represents an overview of the processes and responsibilities associated with submitting transactions to the CESP system.

  1. RESP promoter: Submit transactions (RT 100, 200, 400, 410 and 511) electronically to the CESP Program for the current reporting period.

    The RT 100 and 200 transactions are used to request registration of the Education Savings Plan. RT 400 transactions include the requests for CESG (11), CLB (24), and Alberta Grants (25). RT 410 transactions include SAGES requests (30) and cancel SAGES requests (31).

    Note: Promoters must successfully submit requests for CESG, CLB, Alberta Grants and SAGES within three years of the original transaction date.

  2. CESP via the CESP system: Retrieves the submitted transactions and uploads them to the CESP system.
  3. CESP via the CESP system: Validates the submitted transactions. Data sent to the CESP system passes through three levels of validation (the first two validations take place immediately; the third and final level of validation takes place at step 7).

    The first two levels of information validate non-financial information (RT 100 and RT 200) as follows:
    • Confirms completion of mandatory fields and proper formatting based on ITS (e.g., date fields must be submitted as YYYYMMDD).
    • Verifies compliance with business rules (e.g., beneficiary's age and grant/bond eligibility); conducts SIN validation.

    SIN Validation CESP conducts a preliminary validation on the SIN itself before submitting the remaining SIN information to SIR for validation.
    If the beneficiary SIN fails the preliminary CESP validation, the transaction is rejected and returned on the RT 800 Error report.
    If the beneficiary SIN passes preliminary CESP validation, the beneficiary information (SIN, Name, Surname, DOB, and Sex) is sent for SIR validation.
    If SIR validation fails, the transaction is rejected and returned with an RT 800 Error report specifying which fields did not match.
    If SIR validation is successful, the beneficiary is added to the CESP database and an RT 900 is sent to the RESP promoter.

  4. CESP via the CESP system: Once all contract information has been validated, communicates to the CRA the request to register the ESP.

    CRA will notify the RESP promoter once the plan has been registered.
  5. CESP via the CESP system: Processes RT 400, 410 and 511 transactions, including contributions, requests for CLB, Alberta Grants and SAGES.

    If the transaction includes a request for Additional CESG, CESP confirms the following information with CRA:
    • CRA-held PCG and beneficiary information.
    • Beneficiary is a dependent of the primary caregiver.
    • Additional CESG match rate, based on the PCG's adjusted family net income level.
  6. CESP via the CESP system: Generates reports to RESP promoters, informing them of the production results – including payment or repayment of the CESG, CLB, Alberta Grants and SAGES. Reports are summarized in the box below.

    CESP System Reports

    The RESP promoter will receive confirmation of the status of the transactions submitted to the CESP system including the following notifications:

    • Error Report (RT 800) - validation has failed or information submitted is missing, incorrect, or incorrectly formatted. Transaction must be corrected and resubmitted.
    • Severe Error Report (RT 850) - identifying severe errors and advising that the record is rejected and must be corrected and resubmitted.
    • Transaction Processing Report (RT 900 + RT 910) - acknowledgement that a transaction has been successfully processed.
    • SIN Validation Report (RT 920) - validation of the beneficiary's SIN with SIR has revealed that the SIN is not usable, usable and/or linked.
    • Contract Registration Report (RT 950) - acknowledgement that the contract is eligible for registration.
  7. CESP via the CESP system: Based on processing results, conducts the third and final level of validation, as follows:
    • Updates beneficiary accounts, including total CESG, CLB, Alberta Grants and SAGES paid to the individual beneficiary accounts.
    • Updates Specimen Plan information including Total amount paid for the CESG, CLB, Alberta Grants and SAGES for each Specimen Plan to identify and track liability for the incentives.
  8. CESP via the CESP system: Forwards an electronic bulletin to inform RESP promoters when report files are ready for pick-up.
  9. CESP via the CESP system: Sends the payment to the RESP promoter's account.
  10. RESP promoter: Uses the Transaction Processing Report (RT 900 and 910) to update contract accounts. This could include: 
    • information regarding ‘registerable’ status of the contract (if applicable)
    • payments or repayments of the CESG, CLB, Alberta Grants and SAGES.
    • transfers
    • EAPs
  11. RESP promoter: Uses the Transaction Error Report (RT 800) and Severe Error Report (RT 850) to find rejected transactions and submit updated transactions to correct these errors.

6. Interface Transaction Standards

The CESP ITS provides the format and process for submitting RESP transactions electronically to the CESP.

The ITS allow for the electronic administration and payment of the following education savings incentives:

  • CESG
  • Additional CESG
  • CLB
  • Alberta Grants
  • SAGES

6.1. Electronic Version of the ITS

The ITS can be downloaded from the Promoter section.

Amendments to the ITS are communicated to RESP providers via an electronic bulletin in a ListServ.

6.2. System Compliance with ITS and Industry Testing

All RESP promoters must ensure their systems are compliant with CESP's ITS. The ITS provides the standard by which information is exchanged between ESDC and the financial services industry for the application and administration of the education savings incentives.

The mandatory industry testing process, driven by CESP, helps financial organizations to ensure their systems are ready to report transactions to and receive information from the CESP system. The objective of industry testing is to ensure system compatibility with ESDC and improve the quality of data submitted to CESP, ultimately ensuring the incentive(s) can be paid into the RESP.

As errors do happen, industry testing also ensures that the RESP promoter's system can accept error codes and grant (or bond) refusal reasons.

Test files sent electronically to the CESP must receive an industry testing score of 90% or higher before the RESP promoter can submit files for processing.

Questions or requests pertaining to industry testing should be forwarded to the Canada Education Savings Program (CESP)

6.3. Processing Dates and Reporting Periods

CESP processes submitted transactions and pays incentives on a monthly basis.

CESP provides schedules identifying applicable processing dates, which include:

  • Processing periods
  • Production Run cut-off dates
  • Payment dates

These schedules are forwarded to RESP promoters as an electronic bulletin via ListServ.

6.3.1. Reporting Periods

Reporting periods extend from the first to the last day of the same month. The RESP promoter has four (4) business days after the reporting period ends to submit files for processing. They cannot include any transactions that occurred after the last day of the reporting period.

If CESP receives files after the specified cut-off date, they will hold and process those files in the next processing cycle.

6.3.2. Managed Secure File Transfer (MSFT)

RESP promoters must use MSFT software to send data to CESP via the Internet. It is Entrust ® enabled and is recognized by ESDC as a secure method of data encryption.

Chapter 1-4: Registered Education Savings Plans

A Registered Education Savings Plan (RESP) is an Education Savings Plan (ESP) that has been registered with the Canada Revenue Agency (CRA). It is a savings vehicle intended to encourage saving for post-secondary education. More precisely, it is an arrangement between the RESP promoter and subscriber(s). The subscriber can be:

  • an individual;
  • an individual and their spouse or common-law partner; or
  • a public primary caregiver.

The subscriber makes contributions to an RESP. In return, the RESP promoter agrees to use the accumulated funds to make Educational Assistance Payments (EAPs) to an eligible beneficiary designated by the subscriber. RESP earnings are not taxable until they are withdrawn to finance post-secondary education.

An RESP must be opened to receive payments of education savings incentives in respect of eligible beneficiaries.

See Appendix C for a list of acronyms and terms used in this guide.

1. RESPs - An Overview

RESP promoters offer ESPs designed to help their clients save for a child's post-secondary education.

An ESP contract can be registered if it meets certain terms and conditions stipulated in Section 146.1 of the Income Tax Act (ITA). The ESP then becomes an RESP. Earnings in the RESP are not taxable until they are withdrawn.

Once an ESP has been registered, it is subject to rules that govern contributions, withdrawals, earnings, and the transfer of monies. Compliance with these rules ensures the registered status of the RESP.

The RESP contract will include terms and conditions that the subscriber must agree to. Terms and conditions will vary depending on the type of plan. For example:

  • the need for making contributions to the RESP over the term of the contract; or
  • whether contributions will be intermittent or on a regular basis (at the discretion of the subscriber).

The RESP promoter invests the funds contributed by the subscriber. When the beneficiary attends a post-secondary educational institution, earnings in the plan are used to make EAPs that will help to fund related education expenses. Terms and conditions prescribe when and how these earnings are paid. See Chapter 3-2: Post-Secondary Education and Educational Assistance Payments (EAPs).

When an EAP is made, the subscriber can choose to withdraw the contributions that they have invested. Alternatively, the contributions could be used to help pay for their post-secondary education expenses.

1.1. RESPs May Qualify for Education Savings Incentives

To encourage Canadians to plan and save for their children's post-secondary education, the Government of Canada offers two federal education savings incentives: the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB).

An RESP can also include provincial incentives from one of the three following designated provincial programs:

  • Alberta Centennial Education Savings Plan Grants (Alberta Grants). CESP administers this incentive through an agreement between Employment and Social Development Canada (ESDC) and the province of Alberta.
  • Saskatchewan Advantage Grant for Education Savings (SAGES). CESP administers this incentive through an agreement between ESDC and the province of Saskatchewan.
  • Quebec Education Savings Incentive (QESI) is a provincial incentive established under Quebec legislation. ESDC does not administer this provincial incentive.

Subject to specific eligibility criteria, these education savings incentives are deposited into an RESP. These incentives can enhance RESP earnings and be used with the earnings as an EAP by an eligible beneficiary.

When an ESP is opened and registered and the subscriber makes contributions to that RESP in respect of a beneficiary, the contributions may qualify for the CESG. The beneficiary may also qualify for the CLB and/or provincial incentives. However, the CLB, and the Alberta $500 Grant do not depend on contributions to an RESP. (More information about each of these incentives is provided in Section 2: Education Savings Incentives.)

Note: The Alberta $100 Grants do require contributions to be made to the RESP for the eligible beneficiary.

2. Establishing the RESP

There are four parties involved in the process of opening and registering an ESP. They are:

  • the subscriber
  • the RESP promoter
  • ESDC
  • CRA

2.1. Opening the ESP

A subscriber enters into an ESP contract with an RESP promoter of their choice. The RESP promoter then arranges to have the plan registered.

Typically, the subscriber is the child's parent or parents, but it can also be a beneficiary, a grandparent, another family member, or someone not related to the beneficiary. The ESP can be opened by one person or it can be opened jointly by spouses or common-law partners as well as child care agencies.

There are three different types of ESPs:

  • family plans
  • individual (Non-family) plans
  • group plans

The subscriber(s) must choose the RESP promoter that they would like to deal with and decide what type of plan that they will open. See 4. Type of RESPs, later in this chapter.

2.2. Registering the ESP

An ESP contract must meet certain conditions in order for it to be registered with the CRA.

An RESP promoter must submit certain information to CRA when applying for the registration of an ESP on behalf of the subscriber, as follows:

  • An RESP promoter's application form must be filled out with accurate and valid information, according to procedures established by CRA, and then submitted to the RESP promoter's Head Office.
  • The application form must also include a notice to the subscriber(s) that an overcontribution to the plan may result in a penalty tax.

Any new contract submitted to the Canada Education Savings Program (CESP), will be treated as a request to register the plan with CRA.

CRA will register only those contracts that meet all registration requirements and will notify the RESP promoter of the status of all contracts submitted over a certain period.

2.3. Social Insurance Numbers (SINs)

The SIN is a nine-digit number used in the administration of various Canadian government programs. The Social Insurance Registry (SIR), ESDC, administers the SIN Program.

When an ESP is opened, a SIN is required for:

  • the ESP subscriber;
  • the ESP beneficiary(s); and
  • the beneficiary's primary caregiver, if applying for the additional CESG amounts and/or the CLB.

The SIN is used to:

  • apply for the CESG and CLB;
  • ensure that accurate RESP records are maintained for each beneficiary;
  • track contributions to RESP(s) for each beneficiary;
  • verify each beneficiary's eligibility for education savings incentives administered by the CESP;
  • track incentive payments to RESP(s) in respect of each beneficiary
    (for incentives administered by the CESP);
  • track repayment of incentives administered by the CESP (for example, when withdrawals are made from an RESP); and
  • track EAPs made in respect of each beneficiary.

If a family member or friend wants to enter into an RESP for a child, they will need to obtain the child's SIN from the child's custodial parent.

Note: The child's custodial parent must consent to the use of the child's SIN. If consent is not given, an ESP cannot be opened.

Only the child's custodial parent(s) can apply for a SIN for their child. Visit the Service Canada Web site for the SIN Application Form and instructions:

The form can also be obtained from the nearest Service Canada Centre. There are no fees associated with a SIN application. The SIN card will be sent by mail.

2.3.1. Verifying the Beneficiary's SIN

The SIN is a key piece of information that the CESP uses to verify a beneficiary's eligibility for the applicable education savings incentive(s). When an RESP is entered into, the RESP promoter submits the beneficiary's SIN information electronically to CESP who, in partnership with the SIR, validates the beneficiary's information.

If the beneficiary information submitted by the RESP promoter does not match the information contained in SIR, the submission will result in an error and will lead to the information being rejected by CESP. A report will then be sent to the RESP promoter, identifying the field(s) in error. The RESP promoter will have to verify the information provided by the subscriber and resubmit the data to CESP.

Until the beneficiary information is successfully processed by CESP, any financial information including requests for payments of the CESG, CLB, Alberta Grants and SAGES, will cause errors. The beneficiary information must be successfully processed and established before any financial information can be processed. For more information see Chapter 1-3: The CESP System and Interface Transaction Standards (ITS).

3. Contributions and Contribution Limits

Contributions are deposits made to an RESP by a subscriber in respect of a beneficiary and remain the property of the subscriber. While the subscriber cannot deduct contributions made to an RESP from their taxable income, earnings on contributions are tax sheltered.

Tax on Earnings

Earnings on contributions made to an RESP are not taxable until the earnings are used as part of an EAP by the beneficiary or until they are paid to the subscriber if the beneficiary does not qualify for an EAP.

When beneficiaries receive an EAP to help finance their post-secondary education they will be responsible for paying any taxes on the EAP. Since students generally have limited income, the tax paid will usually be minimal.

If the beneficiary does not attend post-secondary education and the earnings are returned to the subscriber, the subscriber will be responsible for paying any required taxes.

For more information see Chapter 3-3: Options for Assets Remaining in the RESP.

While there is no limit to the number of RESPs that can be opened in respect of a beneficiary, there are limits to the amount that can be contributed across all existing RESPs for one beneficiary. These contribution limits are:

Period Annual Contribution
Limit per Beneficiary
Lifetime Contribution
Limit per Beneficiary
1998 to 2006 $4,000 $42,000
Since 2007 No limit $50,000

A beneficiary's contribution limit is based on the total of all contributions, by all subscribers into all RESPs. The annual and lifetime limits cannot be circumvented by entering into multiple plans.

Overcontributions to an RESP are subject to a penalty tax. For more information, see 5. Overcontributions later in this chapter.

3.1. What Are Not Considered to be Contributions?

Earnings on the contributions are not considered to be contributions when calculating the annual and lifetime contribution limits.

The $25.00 fee paid to an RESP promoter, for a first time request for the payment of the CLB for a beneficiary, is not considered to be a contribution. This payment is to assist in paying for the administrative costs associated with the establishment of these plans.

Federal education savings incentives (CESG and CLB) may be paid into RESPs if certain conditions are met. These incentives are not considered to be contributions when calculating annual and lifetime limits.

Payments to an RESP from a designated provincial programare not considered to be RESP contributions when calculating annual and lifetime limits. These payments are treated in the same way as federal incentives and do not attract federal incentives themselves. Currently, the following three provincial incentives can be paid to an RESP from a designated provincial program:

  • Alberta Grants
  • SAGES
  • QESI
Assisted and Unassisted Contributions

Contributions to an RESP are considered to be either "assisted" or "unassisted":

  • An assisted contribution is a contribution made to an RESP that has attracted the CESG.
  • An unassisted contribution is a contribution made to an RESP that has not attracted the CESG.
3.1.1. Insurance Provisions

Insurance Premiums. Some subscribers may decide to enter into an insurance contract as part of their RESP to ensure that contributions to the RESP will continue in the event of certain circumstances (such as the death of the subscriber). This insurance contract will include the payment of insurance premiums. These premiums are not considered to be contributions to the RESP.

Insurance Proceeds. Payments made to an RESP in accordance with the terms of an insurance contract are referred to as "insurance proceeds" and are considered to be contributions.

Depending on how the plan is structured, administration and trustee fees may or may not be considered to be contributions. If administration or trustee fees are charged outside the plan, they are not considered contributions. If they are charged within the plan, they can be considered part of the contributions and are therefore subject to contribution limits.

Note:  Fees are not to be charged to the education savings incentive portions of an RESP.

Contact CRA - Registered Plans Directorate for more information at 1-800-267-3100.

4. Types of RESPs

There are three types of RESPs: individual (non-family) plans; family plans; and group plans. The following is a description of each of these plan types.

4.1. Individual (Non-Family) Plans

The features of an individual (non-family) plan are as follows:

  • There is a single subscriber (includes child care agencies) or joint subscribers that have a spousal or common-law relationship.
  • There is only one beneficiary at any given time.
  • The beneficiary does not need to be related to the subscriber.
  • There is no restriction on the age of the beneficiary - it can be a child or an adult.
  • There is no restriction on who can be named as the beneficiary. A subscriber could be the beneficiary of their own plan.

The subscriber is responsible for presenting the beneficiary's information to the RESP promoter.

4.1.1. Naming a Replacement Beneficiary

A subscriber can replace an existing beneficiary with a new beneficiary if their contract allows for it. When this happens, the original beneficiary's contribution history could be attributed to the replacement. This could affect the annual and lifetime contribution limits for the new beneficiary, which could result in a penalty tax for all subscribers of that beneficiary.

There will not be any tax consequences to the replacement beneficiary if one of the following conditions is met:

  • The replacement beneficiary is under 21 and is a sibling of the original beneficiary.

    OR
  • Both the original and replacement beneficiaries are under 21 and are related by blood or adoption to the original subscriber of the RESP.

The subscriber will need to present the RESP promoter with all of the necessary information relating to the replacement beneficiary. The RESP promoter must then submit that information to CESP.

See 3. Contributions and Contribution Limits above, and 5. Overcontributions, later in this chapter for more information.

4.1.2. Making Contributions

A subscriber can make contributions to an individual (non-family) plan as long as contribution limits for the beneficiary have not been exceeded. However, contribution limits can be affected by any transfer of monies from one RESP to another. For more information on transfers, see 7. Transfers Between RESPs, later in this chapter and Chapter 3-1: RESP Transfers and the Education Savings Incentives.

Contributions to an individual (non-family) plan must stop at either:

  • 31 years after the end of the year the RESP was opened (35 years in the case of a specified plan)

    OR
  • 31 years after the end of the year of the "earliest effective date that applies" if a transfer has taken place.
Earliest effective date when a transfer has taken place

When a transfer is made between RESPs, the earliest effective date of the two plans must be used to determine the date when plan contributions must stop in the receiving plan. See Chapter 3-1: RESP Transfers and the Education Savings Incentives.

4.2. Family Plans

The features of a family plan are as follows:

  • There is a single subscriber or joint subscribers that have a spousal or common-law relationship.
  • There can be one or more beneficiaries at any given time.
  • The beneficiaries must be related to the original subscriber of the RESP, either by blood or by adoption.
  • An individual can become a beneficiary of a family RESP only if that individual has not yet turned 21 or if the individual was, just before joining the family RESP, a beneficiary under another family RESP.
  • Contributions must be made in respect of individual beneficiaries.
  • Annual and lifetime RESP contribution limits apply to each beneficiary. Contributions made to any RESP in respect of a beneficiary count toward that beneficiary's annual and lifetime contribution limits.
Family Member - Relationship

Each beneficiary of a family plan must be related by blood or adoption to each living subscriber under the plan or be related to a deceased original subscriber. Under the ITA, a "blood relationship" is that of a parent and child (or grandchild or great grandchild) or that of a brother or sister. The subscriber's niece, nephew, aunt, uncle and cousin do not meet the definition of "blood relative". They, therefore, do not qualify as a beneficiary under a family plan.

An individual is not considered to be a "blood relative" of himself / herself.

An adopted child is related by adoption to his parents and grandparents. Stepchildren are related to their stepparents by virtue of being the children of their parent's spouse or common-law partner. This is referred to as "adoption in fact".

The major differences between the individual (non-family) plan and the family plan are that the family plan allows for multiple beneficiaries but requires a blood or adoptive relation between the beneficiary and the original subscriber of the RESP.

With the introduction of Additional CESG rates, CLB, Alberta Grants and SAGES, limitations have been placed on the types of family plans that can receive these incentives. Only plans where all the beneficiaries are siblings can receive payments of these incentives. See the applicable incentive chapters in Section 2: Education Savings Incentives.

4.2.1. Naming an Additional Beneficiary

If the terms of a subscriber's contract allow for it, the subscriber can add beneficiaries to their plan at any time. However, the additional beneficiaries must still be related to the original subscriber of the RESP, either by blood or by adoption.

Furthermore, if Additional CESG, CLB, or Alberta Grants have been paid into the RESP, any additional beneficiaries must be siblings of the existing beneficiaries or these incentives will need to be repaid. While SAGES can only be paid into a sibling-only plan, a cousin can be added to the plan without having to repay the SAGES already in the RESP.

The eligibility criteria for adding a new beneficiary are as follows:

  • Additional beneficiaries must be related to the original subscriber of the RESP, either by blood or adoption.
  • Additional beneficiaries must be under 21 at the time they are added or must have been beneficiaries under another family RESP immediately before being added.
  • The additional beneficiary's SIN must be given to the RESP promoter.
4.2.2. Naming a Replacement Beneficiary

A subscriber can replace an existing beneficiary with a new beneficiary if their contract allows for it. (Beneficiary replacements are possible for plans with single and multiple beneficiaries.) When this happens, the original beneficiary's contribution history could be attributed to the replacement. This could affect the annual and lifetime contribution limits for the new beneficiary, which could result in a penalty tax for all subscribers of that beneficiary.

There will not be any tax consequences to the replacement beneficiary if one of the following conditions is met:

  • the replacement beneficiary is under 21 years of age and is a sibling of the original beneficiary;

    OR
  • the original and replacement beneficiaries are under 21 years of age and are related by blood or adoption to an original subscriber of the RESP.

Note: The replacement beneficiary must comply with the sibling-only requirement associated with the Additional CESG, the CLB and the Alberta Grants. Otherwise, these incentives must be repaid. While SAGES can only be paid into a sibling-only plan, a cousin can be added to the plan without having to repay the SAGES already in the RESP. For more information, see Section 2: Education Savings Incentives.

The subscriber will need to present the RESP promoter with any necessary information relating to the replacement beneficiary. The RESP promoter must then submit that information to CESP.

See 5. Overcontributions, later in this chapter for more information.

4.2.3. Making Contributions

A subscriber can make contributions to a family plan in respect of a beneficiary as long as that beneficiary is under 31 and the beneficiary's contribution limit has not been exceeded. In addition, the beneficiary's contribution limit can be affected by any transfer of monies from one RESP to another. For more information on transfers, see 7. Transfers Between RESPs, later in this chapter and Chapter 3-1: RESP Transfers and the Education Savings Incentives.

Contributions for an individual beneficiary must stop at the earliest of three applicable dates:

  • the date that the beneficiary turns 31;

    OR
  • 31 years (35 for specified plans) after the end of the year the RESP was opened;

    OR
  • 31 years (35 for specified plans) after the end of the year of the "earliest effective date that applies," if a transfer has taken place (see the box, Earliest effective date when a transfer has taken place earlier in this section).

Note: In the event of a transfer, the terms of the contract may outline whether future contributions will be intermittent or on a regular basis.

The contributions themselves are made to the RESP promoter by the subscriber.

Contributions to a family plan with two or more beneficiaries must be directed to and tracked in respect of each individual beneficiary in the plan. The subscriber can make multiple contributions at one time and the contribution amounts do not have to be equal for the different beneficiaries.

4.3. Group Plans

The features of a Group plan are as follows:

  • Each Group plan is a collection of individual (non-family) RESPs.
  • Group plans are usually referred to and marketed as "Education Funds" or "Scholarship Funds".
  • Each Group plan is a group trust.
  • Group plans are administered based on an age cohort concept. This means that RESP contracts for beneficiaries of the same age are administered together.
  • RESP contributions and education savings incentives are tracked per individual beneficiary but are pooled for investment purposes. Pooling is based on all beneficiaries having the same year of eligibility (i.e. they are in the same age cohort and are expected to attend post-secondary education in the same years - usually set to be three or four years).
  • Payments for post-secondary education assistance are determined by the number of beneficiaries who are eligible to receive such payments in the year of eligibility.
  • Earnings associated with CESG, CLB, Alberta Grants and SAGES can only be shared among the beneficiaries of a particular RESP. As group plans are a collection of individual (non-family) plans, these earnings cannot be shared among a group cohort.
4.3.1. Making Contributions

The subscriber must enter into a contractual arrangement with the RESP promoter, specifying a particular savings program. The contract will include the frequency of contributions to be made, the amount of the contributions, and investment options.

The subscriber will then make deposits with the RESP promoter for the duration of the contract. The RESP promoter will credit the contributions to a deposit account in the subscriber's name within the Group trust and then credits any education savings incentives received by the beneficiary to a separate deposit account in the child's name (that is also within the Group trust). Income earned on contributions can be shared within the Group Plan; income earned on education savings incentives cannot be shared.

5. Overcontributions

There are limits on the total amount of RESP contributions that can be made in respect of a beneficiary, across all existing RESPs. These contribution limits are:

Period Annual Contribution
Limit per Beneficiary
Lifetime Contribution
Limit per Beneficiary
1998 to 2006 $4,000 $42,000
Since 2007 No limit $50,000

An overcontribution occurs when the total of contributions made in respect of a single beneficiary exceeds that beneficiary's limit. See 3.1 What Are Not Considered to be Contributions, earlier in this chapter.

RESP promoters are required to ensure that contributions do not exceed these annual and lifetime limits. See 3. Contributions and Contribution Limits, earlier in this chapter.

However, an overcontribution can occur when several subscribers contribute to different RESPs for the same beneficiary without coordinating their contributions. For more information about overcontributions and taxation, contact the CRA at 1-800-267-3100.

The withdrawal of overcontributions will reduce the amount of overcontributions subject to tax, but such a withdrawal will not reduce the total contributions considered to have been made in respect of the beneficiary. This withdrawn amount of overcontributions will still be counted toward the total of contributions made in their respect for the purpose of determining their lifetime limit. Lifetime contribution room is not restored when contributions or overcontributions are withdrawn.

Withdrawing contributions may impact the CESG paid into the RESP. For more information, refer to the applicable chapter in Section 2 - Education Savings Incentives.

5.1. Overcontribution Due to Transfer

An overcontribution situation can also occur when monies are transferred from one RESP to another. When a transfer is made, the contribution history of the beneficiaries in the transferring plan could be attributed to the beneficiaries in the receiving plan, resulting in overcontributions. The contribution history will not be applied to receiving plan beneficiaries if one of the following conditions is met (see the equivalent diagram below):

The transferring and receiving plans have a common beneficiary.

OR

A beneficiary in the receiving plan is a sibling of a beneficiary in the transferring plan.

AND

The receiving plan is a family plan.

OR

A beneficiary of the receiving plan is a sibling of a beneficiary in the transferring plan.

AND

The receiving plan is an individual plan.

AND

The beneficiary of the receiving plan was under 21 years of age when the receiving plan was entered into.

Overcontributions exist in respect of a beneficiary. In the event that an overcontribution arises from a transfer, each subscriber who contributed to any plan in respect of the beneficiary in question will be responsible for penalty taxes on the overcontributions.

For more information about overcontributions and taxation, contact CRA Registered Plans Directorate at 1-800-267-3100.

5.2. Overcontributions Due to Replacement of Beneficiary

When a subscriber chooses to replace the beneficiary of an RESP with another individual, the contribution history of the former beneficiary could be attributed to the replacement beneficiary, resulting in overcontributions (and associated tax penalties). Replacement of a beneficiary will not result in overcontributions if one of the following conditions is met:

  • the replacement beneficiary is a sibling of the former beneficiary and is not yet 21 at the time of the replacement;

    OR
  • neither of the beneficiaries has yet turned 21 and both are related to the original subscriber of the RESP, either by blood or by adoption.

If the replacement beneficiary doesn't meet any of the above conditions, this beneficiary could be in an overcontribution situation.

5.3. Penalty Tax on Overcontributions

When an overcontribution occurs, every subscriber is required to pay a 1% per month tax on their share of the overcontribution until it is withdrawn.

Overcontributions reduce lifetime RESP limits, even after they are withdrawn.

For more information about overcontributions, contact CRA at 1-800-267-3100.

6. RESP Accounts

An RESP is comprised of the following RESP accounts:

  • assisted Contributions made to the RESP by the subscriber
  • unassisted Contributions made to the RESP by the subscriber
  • CESG
  • CLB - maintained separately for each beneficiary
  • provincial Incentives – accounts maintained separately for each designated provincial program
  • earnings

When a financial transaction is processed for a beneficiary, the associated funds are deposited into or withdrawn from the appropriate account (i.e. contributions are deposited into the contribution account; the CLB is deposited into the CLB account, etc.). The RESP promoter must track the activity of these accounts for each beneficiary and for each plan.

Separate CLB accounts must be maintained for each eligible beneficiary. Refer to the specific incentive chapter(s) for more information.

6.1. Provincial Incentives

An RESP promoter must be able to track transactions associated with each of the designated provincial programs that the promoter delivers to the public.

For example:

  • Promoters delivering the Alberta Grants have RESP accounts to track all activities associated with Alberta Grants. As the CESP administers Alberta Grants, transactions associated with Alberta Grants are reported to CESP using the Alberta Grants account.
  • Promoters delivering SAGES have RESP accounts to track all activities associated with SAGES. As the CESP administers SAGES, transactions associated with SAGES are reported to the CESP using the SAGES account.
  • Promoters delivering the QESI have RESP accounts to track all activities associated with QESI. As the CESP does not administer QESI, promoters do not report, to the CESP, specific QESI amounts associated with RESP transactions.
    Reporting QESI data to the CESP

    Promoters must include all assets in RESPs when reporting the Fair Market Value (FMV) of an RESP in their monthly summary reports (RT 700). As such, the FMV amount should include saving incentives from all sources present in the RESP, including the QESI if applicable.

    Promoters are not required to report specific QESI amounts in EAP transactions reported to the CESP. However, if there are QESI amounts in an EAP, they must be included in the total EAP Amount reported to the CESP.

7. Transfers Between RESPs

The ITA allows for the transfer of monies from one RESP to another unless the contract terms of a specific plan do not permit it. If a subscriber decides to make a transfer, they can choose to transfer all of the monies in the RESP or only part of them.

7.1. Different Types of Transfers

The following is a list of the various types of transfers that can be made:

  • A transfer can be either internal or external.
    • An internal transfer is made between RESPs administered by the same RESP promoter
    • An external transfer is made between RESPs administered by different RESP promoters
  • A transfer can be made between RESPs that share a common beneficiary but different subscribers.
  • A transfer can be made between RESPs that share a common subscriber but different beneficiaries.
  • A family plan with multiple beneficiaries can be split into several individual (non-family) plans by transferring monies from one RESP into several RESPs.
  • Several individual (non-family) plans can be combined into a family plan with multiple beneficiaries by transferring monies from several RESPs into one RESP.

For more information, see Chapter 3-1: RESP Transfers and the Education Savings Incentives.

7.2. Conditions for an Eligible Transfer

RESP promoters and subscribers must be vigilant in ensuring that the proper conditions are met for transfers and beneficiary replacements for plans that hold the following incentives:

  • CLB
  • Alberta Grants
  • Additional CESG
  • SAGES

Transfers and beneficiary replacements may result in the repayment of the CLB, Alberta Grants, SAGES and the entire CESG amounts (not just the Additional CESG amounts) if certain conditions are not satisfied.

Conditions for eligible transfers of each incentive are described in Chapter 3-1: RESP Transfers and the Education Savings Incentives.

7.3. Recording Transfers

When a transfer is made between different RESP promoters, the RESP promoter receiving the transferred monies must also receive sufficient information to administer the RESP on a continuing basis. This includes obtaining all of the details about the subscriber and the beneficiary(ies), the effective date of the plan, and complete historical information about contributions and the education savings incentives.

It is mandatory to complete transfer forms each time an RESP transfer occurs, even if the two RESPs are administered by the same promoter. These transfer forms are posted on the ESDC website.

See Chapter 3-1: RESP Transfers and the Education Savings Incentives.

8. Distribution of Assets from an RESP

There are six different ways that a distribution of RESP assets can be made by an RESP promoter:

  • EAPs;
  • accumulated income payments (AIPs);
  • rollover of RESP investment earnings into a Registered Disability Savings Plan (RDSP);
  • rollover of RESP earnings to a registered retirement savings plan (RRSP);
  • payments to a designated educational institution in Canada; and
  • payments of contributions to either the subscriber or the beneficiary.

For more information, see Chapter 3-3: Options for Assets Remaining in the RESP.

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