The Government of Canada extends beneficiaries of the Registered Education Savings Heritage Plan a grant in the form of Canada Education Savings Grant. The Canadian Government, under this program, adds up to 20 percent to the initial 2000 dollars contributed to the RESP beneficiary account every year.
The CESG program intends to encourage parents to save some money for their child’s academic progress and reduce the financial load of sponsoring a post-secondary education.

Incentives received from CESG are determined by contributions made into the Registered Education Savings Plan RESP. Funds saved in the plan account can be utilized to pay for part-time or full-time studies in an apprenticeship endeavor, a CEGEP, colleges, trade schools, and universities.
In order to access CESG, personal deposits have to made into a savings plan account. It is important to note that anyone can open a Registered Education Savings Plan account for a minor: not just the parents of the child.

The CESG program contributes up to 20 cents on each dollar contributed on behalf of the child every year, up to a maximum of 500 dollars on a 2500 dollar contribution. If funds are not deposited in a particular financial period, a plan financier is permitted to catch up and compensate in future years. Money can be deposited to a registered savings plan account until the year in which the beneficiary turns 17 years old.

Moreover, in light of the child’s primary caregiver income, the savings plan beneficiary might also receive an additional 20 percent of the contributions deposited into their RESP account from the CESG program.

The Canada Education Savings Grant is extended until the last day of the year in which the beneficiary turns 17, for as long as the child has a binding Social Insurance Number, is a resident of Canada, a savings account has been opened in the child’s name, and a formal request has been submitted for the grant. In order to be eligible to receive the grant, a parent must make deposits to the child’s RESP before the calendar year in which the beneficiary turns 15 years old.
Please note that 16 or 17 years old beneficiaries might receive the grant if at least 2000 dollars were deposited into the child’s RESP account before the last day of the year in which the beneficiary turned 15, or at least 100 dollars was deposited annually into the beneficiary’s RESP account for the four years that preceded the year in which the beneficiary turned 15.

Lastly, the lifetime cap for the Canada Education Savings Grant program is 7200 dollars for every child. If a beneficiary does not wish to pursue further education after their high school, a parent must not keep any of the Heritage Education Funds extended as grant: in such cases, the parent has to return the money back to the Government of Canada.

However, parents can opt to transfer the funds between RESP accounts for siblings without having to incur any tax penalties. Please note that this option only applies to transactions that are transferred after 2010.

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