Using your RESP
Withdraw funds from your RESP (Educational Assistance Payments)
Request an Educational Assistance Payment on behalf of the student
Once the child (the RESP beneficiary) has graduated from high school and enrolled full-time or part-time in a qualifying post-secondary educational program, you can request, on his or her behalf, to withdraw money from the RESP to help pay for their studies.
When you withdraw government payments or interest earned from an RESP account, that money is called an Educational Assistance Payment.
Educational Assistance Payments include the interest earned in the RESP as well as any Canada Education Savings Grants, provincial grants and Canada Learning Bonds received. You can use this money to pay for post-secondary school expenses like tuition, books and transportation.
Note: Educational Assistance Payments only include the interest and the grants. You can withdraw as much as you want of your own contributions to pay for the beneficiary's education. RESP withdrawals are considered when assessing need for Canada Student Loans and Grants.
Provide required documentation to support your request
To withdraw money from an RESP, contact your RESP provider. They will ask to see official proof of enrollment before issuing the Educational Assistance Payment. They may also provide you with a list of allowable expenses that the money can be used for, or they may ask for receipts for school purchases to prove the money is being spent on allowable educational expenses.
Because they are responsible for administering the RESP in accordance with the Income Tax Act, your RESP provider determines what is considered a “reasonable” expense (i.e. one that can be paid for with the savings). Any expense that is in accordance with the Act and the terms of the plan would be considered reasonable.
One way to decide if a school expense is reasonable is to ask yourself whether or not this purchase will serve to further the student’s studies.
Note: Your RESP provider may have established guidelines or policies with respect to acceptable educational expenditures. For more information, visit the Canada Revenue Agency website.
Amount of money that can be withdrawn
If the beneficiary is enrolled in full-time post-secondary studies, Educational Assistance Payments are limited to $5,000 during the first 13 consecutive weeks of enrollment.
After that, you may request any available amount with no limit unless the student takes a break from his or her studies and does not re-enroll in a qualifying educational program for 12 months. If that happens, the original limit is reinstated.
If the beneficiary is enrolled in part-time studies, Educational Assistance Payments are limited to $2,500 for every 13-week period of enrollment.
For both full- and part-time studies, the student is also eligible to receive payments for up to six months after the end of his or her enrollment in a qualifying program (provided the provisions of your plan allow this benefit). This is only possible if the expenses would have qualified for Educational Assistance Payments if they had been paid immediately before the student’s enrollment stopped.
For more information, visit the Canada Revenue Agency website.
Note: Educational Assistance Payments include only the interest and the grants; you can withdraw as much as you want of your own contributions to pay for the beneficiary’s education.
If you need to withdraw more money than the limits allow for full- or part-time studies, your RESP provider can submit a request to the Minister of Employment and Social Development for approval. If the request is approved, the provider must then complete a request form on your behalf and submit it to the Canada Education Savings Program.
Canada Education Savings Grant lifetime limit
Educational Assistance Payments consist of earnings as well as the Canada Education Savings Grants, provincial grants and Canada Learning Bonds received. The beneficiary cannot receive more than $7,200 in Canada Education Savings Grants in his or her lifetime.
When a student receives an Educational Assistance Payment, he or she will also receive a notice detailing the amount of Canada Education Savings Grants in the payment received. It is the student’s responsibility to keep track of the amount of Canada Education Savings Grant money received; beneficiaries must repay any amount over the $7,200 limit.
Income tax considerations
Students who receive money from an RESP must claim their Educational Assistance Payment as income. Since students typically have limited income while in school, however, they may not be required to pay any income tax on this amount. This depends on individual circumstances. Your RESP provider will issue the student a T4A slip for income tax purposes.
Minimum duration of a qualifying educational program
Full-time program in Canada: A course of study that lasts at least three weeks in a row, with at least 10 hours of instruction or work per week.
Full-time program outside Canada: A program at a foreign educational institution with a duration of at least 13 weeks.
Part-time program in Canada: An educational program at post-secondary school level that lasts at least three consecutive weeks, and that requires a student to spend not less than 12 hours per month on courses in the program.
Programs that qualify include apprenticeships as well as programs offered by:
- trade schools;
- universities; and
- other institutions certified by the Minister of Employment and Social Development.
Post-secondary education institutions recognized for Educational Assistance Payments
For the purposes of an Educational Assistance Payment, a post-secondary educational institution can be any one of the following:
- a university, college or other educational institution in Canada that is designated under the Canada Student Financial Assistance Act. For more information, see List of Designated Educational Institutions;
- an educational institution in Canada certified by the Minister of Employment and Social Development as an institution that provides courses (other than courses for university credit) that furnish a person with skills for, or improve a person’s skills in, an occupation.
To verify if a particular educational institution in Canada has been certified, contact Employment and Social Development Canada’s Certification Program at 1-866-517-5650 or see Certification of Educational Institutions.
- a university, college or other educational institution in Canada that has been designated by a provincial authority under the Canada Student Loans Act. Your student financial assistance office can provide more information. For the contact information for the student financial assistance office in your province/territory or call Service Canada at 1 800 O-Canada (1-800-622-6232).
- a university, college or other educational institution in Canada that has been designated by the Province of Quebec. For information regarding eligible post-secondary educational institutions in Quebec, contact the province’s Loans and Bursaries Program at 1-877-643-3750;
- a university, college or other educational institution outside Canada that provides courses at the post-secondary level. For the purposes of Educational Assistance Payments, eligible educational institutions outside of Canada do not have to be on the List of Designated Educational Institutions. For an Educational Assistance Payment to be paid out, the beneficiary must have been enrolled in a course with a duration of not less than 13 consecutive weeks (3 weeks for university programs).
The post-secondary educational institution must satisfy only one of the criteria above to be eligible for Educational Assistance Payment purposes. It is the RESP provider’s responsibility to examine all relevant authorities to verify if an educational institution is recognized.
What happens if your child does not continue his or her education after high school?
You have five choices:
1 - Leave the money in the RESP
An RESP can be left open for up to 36 years. If your child does not continue his or her education after high school, you can keep the plan open in case he or she decides to continue past high school. Check the rules of your plan to find out if there are any more conditions.
2 - Replace the beneficiary
- In an individual plan, you may have the option of naming another beneficiary. Some rules may apply—ask your provider.
- In a family plan, you can use the earnings and certain federal and provincial grants to pay for the education of another child under the plan.
- Check with your group plan to find out if you can transfer the plan to another beneficiary without paying a fee.
3 - Transfer the money to your RRSP
You may be able to transfer up to $50,000 of earnings tax-free from the RESP to your RRSP if:
- the RESP has been open for at least 10 years;
- all beneficiaries are at least 21 and not currently continuing their education after high school;
- you have room to add money to your RRSP;
- you are a Canadian resident; and
- the rules of the plan allow it.
4 - Close the RESP
Here is what happens to the money in the RESP:
- your contributions are yours to keep. You do not have to pay tax on any contributions;
- you must return all remaining grants and bond to the Government since this money can only be used to pay for post-secondary education;
- you can get your investment earnings out of the plan if:
- it has been open for 10 years; and
- the beneficiaries are at least 21 and not currently continuing post-secondary education.
5 - Transfer the money to an RDSP
You may be able to transfer investment earnings from your RESP to a Registered Disability Savings Plan (RDSP) if the plans share a common beneficiary and one of the following conditions is met:
- the beneficiary of the RESP has a severe and prolonged mental impairment that can reasonably be expected to prevent the beneficiary from pursuing post-secondary education; or
- the RESP has been open for at least 10 years and each beneficiary is at least 21 years of age and is not pursuing post-secondary education; or
- the RESP has been open for at least 35 years.
Note: You should speak to your RESP provider to find out if this option is available under the terms of your plan.
The following RDSP requirements must also be met at the time the rollover is made:
- the beneficiary is eligible for the Disability Tax Credit;
- the beneficiary is less than 60 years of age in the year the rollover is made;
- the beneficiary is a resident of Canada;
- the rollover amount cannot cause the RDSP to exceed the lifetime contribution limit of $200,000; and
- the plan must not be a Specified Disability Savings Plan.
When RESP investment earnings are rolled over to an RDSP, the RESP must be closed before March of the year following the year of the rollover. In addition, the remaining Canada Education Savings Grant, Canada Learning Bond and provincial incentives must be repaid. Contributions in the RESP will be returned to the RESP subscriber.
For more information on rolling over education savings to an RDSP, see RDSP Bulletin No. 4 or call 1-800-959-8281 (TTY users call 1-800-665-0354).
Ask your provider for details and restrictions.
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