Chapter 1. Registered Education Savings Plan provider user guide – Employment and Social Development Canada’s Canada Education Savings Program

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

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List of acronyms

AIP
Accumulated income payment
BCTESG
British Columbia Training and Education Savings Grant
BN
Business number
CEGEP
Collège d’enseignement général et professionnel
CESG
Canada Education Savings Grant
CESP
Canada Education Savings Program
CLB
Canada Learning Bond
CRA
Canada Revenue Agency
CSAA
Children Special Allowances Act
EAP
Educational assistance payment
ESDC
Employment and Social Development Canada
ESP
Education savings plan
FIPPA
Freedom of Information and Protection of Privacy Act
ITA
Income Tax Act
PCG
Primary caregiver
PIB
Personal Information Banks
PIPA
Personal Information Protection Act
PIPEDA
Personal Information Protection and Electronic Documents Act
QESI
Quebec Education Savings Incentive
RESP
Registered Education Savings Plan
SIN
Social Insurance Number
SIR
Social Insurance Registry

Introduction

Employment and Social Development Canada (ESDC) is responsible for the administration and delivery of:

  • 2 federal education savings incentives linked to Registered Education Savings Plans (RESPs), and
  • 1 provincial education savings incentive on behalf of the Government of British Columbia

Within ESDC, the Canada Education Savings Program (CESP) provides:

  • the delivery mechanism, and
  • the necessary system supports for the effective administration of the federally administered education savings incentives

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

For more information, refer to Appendix C for a list of acronyms and terms used in this guide.

1.1. Education savings incentives

The purpose of education savings incentives is to encourage Canadian residents to save for a child’s post-secondary education. It includes:

  • full-time and part-time studies at a trade school
  • collège d’enseignement général et professionnel (CEGEP) (in French only)
  • college
  • university, or
  • an apprenticeship program

ESDC administers the following education savings incentives:

  • Canada Education Savings Grant (CESG)
  • Canada Learning Bond (CLB)
  • British Columbia Training and Education Savings Grant (BCTESG)

The Government of Quebec offers the Quebec Education Savings Incentive (QESI), a provincial education savings incentive paid under Quebec legislation. ESDC does not administer the QESI.

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

Under the Income Tax Act (ITA), a designated provincial program is a program established under the laws of a province.

1.1.1. CESG at‑a‑glance

The CESG consists of:

  • a basic amount of the CESG (Basic CESG), introduced in 1998, and
  • an additional amount of CESG (Additional CESG), introduced in 2005

The annual CESG amounts on annual contributions are:

  • Basic CESG rate of 20% on annual contributions made to an RESP in respect of a beneficiary. The amount of annual Basic CESG payable per beneficiary to the lesser of the following amounts:
    • accumulated grant room available for the beneficiary
    • annual limit of $1,000 per beneficiary
  • Additional CESG rate of 10% or 20% on the first $500 or less of annual contributions made in respect of a beneficiary

Eligibility for the Additional CESG, Additional CESG rates are depending on the individual primary caregiver’s (PCG) adjusted income:

  • additional 10%: adjusted income is greater than $53,359Footnote 1 but less than or equal to $106,717Footnote 1
  • additional 20%:
    • the adjusted income is less than or equal to $53,359Footnote 1, or
    • the child is in the care of an agency which receives payments under the Children’s Special Allowances Act (CSAA)

The Canada Revenue Agency (CRA) confirms those beneficiaries eligible to receive the additional 10% and 20% CESG. The rates are depending on their individual primary caregiver’s adjusted income.

To learn more about the CESG, refer to Chapter 5. The Canada Education Savings Grant.

1.1.1.1. Grant room and carry forward

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

  • 1998 to 2006: the CESP adds $400 to the grant room for each eligible child per year since 1998, or since birth, if the child is born after 1998
  • since 2007: the CESP adds $500 to the grant room for each eligible child per year since 2007, or since birth, if the child is born after 2007

The eligibility for the Additional CESG is made annually, based on reported income information applicable at that time. Consequently, rights to the Additional CESG cannot carry forward for use in future years. The Additional CESG payments made to an RESP in respect of a beneficiary do not affect the grant room.

1.1.2. CLB at‑a‑glance

The CLB is available for an eligible child born in 2004 or later. Since July 1, 2017, the CLB eligibility is based, in part, on:

  • the number of qualified children, and
  • the adjusted income of the individual primary caregiver

The individual primary caregiver is the person eligible to receive the Canada child benefit (CCB). For children in care, the public primary caregiver is eligible to receive payments under the Children’s Special Allowances Act (CSAA).

The CLB is a federal education savings incentive directed to a specific child and consists of 2 types of payments:

  • an initial CLB payment of $500 for the first year the child is eligible, and
  • subsequent CLB payments of $100 for each following year that the child is eligible. The CLB is payable up to and including the year in which the child turns 15

The maximum lifetime CLB limit is $2,000. The amount of CLB that a beneficiary receives is dependent on how many years the beneficiary meets the eligibility criteria. An eligible child can request accumulated CLB entitlements up to their 21st birthday. After that, all accumulated CLB entitlements will be forfeited.

ESDC will keep track of the 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 the CLB entitlements can be paid. As of January 1, 2022, a person that is 18 to 20 years old may qualify to open an RESP. This person is both the subscriber and the beneficiary, and therefore applies for the CLB on their own behalf.

To learn more about the CLB, refer to Chapter 6. The Canada Learning Bond.

1.1.3. BCTESG at‑a‑glance

The BCTESG is available for children born on or after January 1, 2006.

The custodial parent or a legal guardian and the beneficiary must be residents of British Columbia when they apply for the BCTESG.

The BCTESG is a $1,200 one‑time grant payment per eligible beneficiary. When an eligible child turns 6 years old, the subscriber may be able to apply for the grant.

To learn more about the BCTESG eligibility criteria and application processes, refer to Chapter 7. British Columbia Training and Education Savings Grant.

1.2. An overview of roles and responsibilities

To administer education savings incentives payments, ESDC partners with:

  • RESP promoters
  • the CRA
  • the Social Insurance Registry (SIR)
  • the Government of British Columbia

Each organization shares information and manages processes. It enables ESDC to deposit the education savings incentives into an RESP in respect of an eligible beneficiary.

The following individuals also play a key role in an RESP opened in respect of a beneficiary:

  • the subscriber(s)
  • the custodial parent(s) or legal guardian(s)
  • the primary caregiver and their cohabiting spouse or common‑law partner, if applicable

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

1.2.1. Subscriber

In order for a beneficiary to receive any of the education savings incentives, the subscriber must:

  • meet with a participating RESP promoter
  • open an education savings plan (ESP) and name a beneficiary, and
  • request the registration of that the ESP be registered with the CRA via the CESP system
  • Note: To receive the Additional CESG, the CLB and the BCTESG:
    • 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 the CRA
    • ensure the beneficiary meets all eligibility criteria for the education savings incentive(s)
    • make contributions to the RESP without exceeding the lifetime limit of $50,000 per beneficiary

Note: Payment of the CLB and the BCTESG do not depend on contributions. However, the deposit of contributions is a prerequisite for the CESG

  • apply for the incentive(s) in respect of an eligible beneficiary by completing the appropriate application form

For more information about the application process, refer to Appendix A. Application forms – education savings incentives.

1.2.2. Custodial parent or legal guardian

Education savings incentives payments administered by ESDC require the beneficiary’s Social Insurance Number (SIN).

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

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

For the BCTESG, the subscriber and the parent or legal guardian (if applicable) must:

  • complete and sign the application for the British Columbia Training and Education Savings Grant

1.2.3. PCG, cohabiting spouse or common‑law partner

A person is the individual PCG of a beneficiary if they are eligible to receive the CCB for the beneficiary.

To request the Additional CESG and the CLB for a beneficiary under 18 years of age:

  • an individual PCG must provide their name and SIN on the CESP application form (ESDC SDE 0093). As of January 1, 2018, if applicable, the information provided can be from their cohabiting spouse or common‑law partner. The CESP uses the PCG’s adjusted income, in part, to validate eligibility for the CLB and the Additional CESG
  • by completing and signing the CESP application form (ESDC SDE 0093), this person is providing their information to validate eligibility for the Additional CESG or the CLB. They are also designating the RESP to receive these incentives in trust
  • the CRA calculates an individual PCG’s adjusted income using, in part, the net income reported on line 23600 of tax returns. It includes the PCG’s cohabiting spouse or common‑law partner, if applicable
  • an organization is the public PCG of a beneficiary if it is entitled to receive payments for the beneficiary under the CSAA. A public PCG must provide their business number (BN) to request the Additional CESG and the CLB

Adult beneficiaries and CLB application

Since January 1, 2022, there is a new way for beneficiaries 18 to 20 years old to access their CLB entitlement. They may qualify to open an RESP in which they are both the subscriber and the beneficiary. They can therefore apply for the CLB on their own behalf.

To request the CLB for a beneficiary of said ages, whether or not they are the subscriber to the RESP:

  • the promoter must provide the CESP application form ESDC SDE 0107 to the adult beneficiary to complete and sign:
    • this form does not collect any PCG information (contrary to the CESP application form ESDC SDE 0093)
    • it must include the name and signature of all subscribers of the RESP selected to receive the CLB

1.2.4. 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
  • enrolling with the CRA as an RESP promoter. During this process, RESP promoters will submit proposed specimen plans to the CRA. Upon approval, they will receive a specimen number for each plan
  • enrolling 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 system testing to ensure compliance with the CESP system requirements

For more information about the enrollment process, contact ESDC by email at: NC‑INSCRIPTION_ENROLMENT‑GD@hrsdc‑rhdcc.gc.ca

To receive education savings incentives administered by ESDC, promoters can assist their clients in opening RESPs by:

  • collecting from the subscriber the information required to open and register an ESP and to apply for the education savings incentive(s). Promoters must protect this information according to federal and provincial privacy requirements. For more information, refer to 1.3. Federal and provincial privacy requirements
  • registering ESPs with the CRA via the CESP system
  • assisting subscribers in applying for the applicable education savings incentives in respect of eligible beneficiaries
  • submitting contract and financial information to the CESP system electronically and according to a specified format. This information includes RESP and incentive‑related data. For more information, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards
  • tracking contributions (assisted and unassisted), earnings, the CESG, the CLB and the BCTESG in separate RESP notional accounts
  • advising the subscriber when they receive incentive payments or if repayments are required
  • transferring funds to another RESP based on a request from the subscriber. This may include collaborating and communicating with other RESP promoters
  • maintaining a record of all RESP transactions. They must report this information, to the CESP system and, includes all:
    • contributions
    • withdrawals
    • educational assistance payments (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. For more information, refer to Chapter 10. 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 the AIP from an RESP to an RDSP
    • transfer of the AIP from an RESP to an RRSP, or
    • payment to a designated post‑secondary educational institution

For more information, refer to Chapter 11. Options for assets remaining in the Registered Education Savings Plan.

Unless otherwise specified, the procedures associated with each of the above responsibilities are in these chapters:

1.2.5. 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 to administer effectively 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 the 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. The CESP obtains this information through an information‑sharing process with the CRA
  • processes the BCTESG payments in collaboration with the Government of British Columbia, 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 the CESP system interacts with the RESP promoter in each of these circumstances.

1.2.6. Canada Revenue Agency

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

The CRA is responsible for:

  • administering the registration of ESPs according to the requirements set out under the ITA
  • sharing information for the purposes of confirming a beneficiary’s eligibility for the Additional CESG and the CLB, and
  • confirming a beneficiary is a child in care of an agency receiving payments under the CSAA

For the purposes of the Additional CESG:

  • the CRA validates eligibility based on the adjusted income level of the beneficiary’s individual primary caregiver

For more information, refer to Chapter 5. The Canada Education Savings Grant.

For the purposes of the CLB:

  • the CRA validates eligibility based, in part, on the number of qualified children and the adjusted income of the beneficiary’s individual primary caregiver

For more information, refer to Chapter 6. The Canada Learning Bond.

1.2.7. British Columbia Government

The Government of British Columbia:

  • funds the BCTESG program, and
  • has an agreement with ESDC to deliver this initiative

Within ESDC, the CESP utilizes its system and the existing program framework to:

  • administer and deliver the BCTESG on behalf of the province of British Columbia

For more information, refer to Chapter 7. British Columbia Training and Education Savings Grant.

1.3. Federal and provincial privacy requirements

To apply for education savings incentives, promoters must collect information about:

  • the subscriber
  • the beneficiary
  • the custodial parent or legal guardian, and
  • the PCG or the individual PCG’s cohabiting spouse or common‑law partner

Federal and provincial privacy legislation stipulates how organizations in the private sector must:

  • manage the collection, storage and use of personal information

It is important for promoters to be aware of and understand the privacy legislation in place in each jurisdiction.

1.3.1. Federal privacy legislation

Canada has 2 federal privacy laws:

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

The Privacy Act:

  • gives individuals the right to access and request correction of their personal information held by federal government institutions, 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. This ensures the registration of PIBs and that they are approved and identified in Info Source.

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 of the Office of the Privacy Commissioner of Canada.

The PIPEDA is a federal legislation that protects personal information. PIPEDA sets out principles that organizations, individuals, associations, partnerships, and trade unions must follow. Those principles apply 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)
  • retail sector
  • publishing companies
  • service industry
  • manufacturers, and
  • other provincially regulated organizations

For more information about PIPEDA, visit the web site of 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. It will also apply 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 has the authority to receive and investigate complaints.

1.3.2. Provincial privacy legislation

The province of British Columbia has its own privacy legislations named the:

  • Freedom of Information and Protection of Privacy Act (FIPPA)
  • Personal Information Protection Act (PIPA)

In the public sector, FIPPA gives individuals the right to request records that contain:

  • their personal information, and
  • records such as reports, audits, and financial information of the public body

In the private sector, PIPA gives individuals the right to request access to:

  • their personal information in the custody or control of a private sector organization

Both FIPPA and PIPA set out the rules that public bodies and organizations must follow when handling personal information including:

  • the collection
  • the use, and
  • the disclosure of personal information

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

1.4. The education savings incentives processes ‑ An overview

The following number list provides an overview of the application and payment process for the education savings incentives administered by ESDC:

  1. open education savings plan (ESP) and have it Registered (RESP)
  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)
  4. facilitate any transfers between RESPs
  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
  8. assist subscriber in distributing remaining RESP earnings

Note: Step 1, 3, 6 and 7 require the submission of electronic transactions to the CESP system.

For more information about submitting these transactions, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards.

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