Is your child in high school?

by Sound Choices, AGF Management Ltd.

Insights and Market Perspectives

Author: Sound Choices

August 25, 2020

Education Savings:
Special CESG rules for beneficiaries aged 16 and 17


The content in the article below is meant for Canadian investors only.


Did you know that – while RESP (Registered Education Savings Plan) savings can be supplemented with government education savings initiatives, including the Canada Education Savings Grant (CESG), special CESG rules apply to beneficiaries aged 16 and 17?

Key Facts about the Canada Education Savings Grant (CESG)

  • All RESPs are eligible for Basic CESG
  • The Government of Canada will match a percentage of your RESP contributions by depositing the CESG directly into the RESP
  • The basic CESG provides 20 cents on every dollar you contribute, up to a maximum of $500 (20% of the first $2,500 of annual contributions per beneficiary) per year
  • $7,200 Lifetime CESG maximum per beneficiary
  • CESG paid into a Family Plan RESP may be used by any beneficiary of the RESP to a lifetime maximum of $7,200 per beneficiary
  • If you cannot make a contribution in any given year, you can carry over unused Basic CESG. By contributing more than $2,500 in subsequent years, you can get up to $1,000 of Basic CESG per calendar year if unused CESG amounts are available

Beneficiaries aged 16 and 17

If a beneficiary is turning 16 and 17 in the current calendar year, they are eligible for the CESG if one of two conditions is met:

  1. A minimum of $2,000 worth of contributions was made, and not withdrawn from an RESP, on behalf of the beneficiary before the end of the calendar year in which the beneficiary turned 15.
  2. A minimum of $100 in annual contributions was made, and not withdrawn from an RESP, in any four years (doesn’t have to be consecutive) before the end of the calendar year in which the beneficiary turned 15.

Case study #1

My son was 17 when I opened a Family RESP for my two younger children last year. He was not named as a beneficiary at that time because we knew he would not be eligible for the Canada Education Savings Grant (CESG). Is it still possible to add him to the account and have him use the grant proceeds accumulated by his siblings?

Yes, he can still be added to the account as long as it is before his 21st birthday. He would have access to grant proceeds, as grant monies are shared in a Family RESP.


Case study #2

I want to open a Registered Education Savings Plan (RESP) for my 15-year-old daughter. She has previously never been a beneficiary under any RESP. Will she be eligible to receive grant money once the RESP is set up?

She is eligible to receive grant money on any contributions made in the year before the beginning of the year in which she turns 16. If the subscriber contributes $2,000 (and does not withdraw it) before the beginning of the year in which the beneficiary turns 16, the beneficiary will also be eligible to receive grants on any contributions made in the years she turns 16 and 17.


Ask your financial advisor today about how to get started with education savings, and visit AGF.com/RESP.


Additional Resources


Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated.

The commentaries contained herein are provided as a general source of information and should not be considered personal investment or tax advice. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change investment decisions arising from the use or reliance on the information contained here.

The contents of this Web site are provided for informational and educational purposes, and are not intended to provide specific individual advice including, without limitation, investment, financial, legal, accounting or tax. Please consult with your own professional advisor on your particular circumstances.

AGF Management Limited (“AGF”), a Canadian reporting issuer, is an independent firm composed of wholly owned globally diverse asset management firms. AGF’s investment management subsidiaries include AGF Investments Inc. (“AGFI”), AGF Investments America Inc. (“AGFA”), Highstreet Asset Management Inc. (“Highstreet”), AGF Investments LLC (formerly FFCM LLC) (“AGFUS”), AGF International Advisors Company Limited (“AGFIA”), AGF Asset Management (Asia) Limited (“AGF AM Asia”), Doherty & Associates Ltd. (“Doherty”) and Cypress Capital Management Ltd. (“CCM”). AGFI, Highstreet, Doherty and Cypress are registered as portfolio managers across various Canadian securities commissions, in addition to other Canadian registrations. AGFA and AGFUS are U.S. registered investment advisers. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. AGF investment management subsidiaries manage a variety of mandates composed of equity, fixed income and balanced assets.

TM The “AGF” logo and ® “Sound Choices” are registered trademarks of AGF Management Limited and used under licence.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

For further information, please visit AGF.com.

© 2020 AGF Management Limited. All rights reserved.

This post was first published at the AGF Perspectives Blog.

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