< BACK

DEFINITIONS


ABCEFGINPQRSU


Accumulated Income Payment (AIP)

Redemption of the principal and/or growth portion not used for educational purposes. The money redeemed will go to the RESP subscriber(s).


Additional Canada Education Savings Grant (Additional CESG)

A funding program that supplements the existing Basic CES Grant program. It is available for contributions made to an RESP from 2005 onwards. This program is available to low and middle-income families and personal income thresholds determine the percentage of funding. For Family RESP plans, all children within the plan must be siblings in order to be entitled to receive Additional CES Grant.

Additional CES Grant is available on RESPs for families who have earned annual combined family income of:

  • LESS than $39,066 in 2010 in order to receive up to an additional 20% on the first $500.00 contributed annually in an RESP, or
  • LESS than $78,131 in 2010 in order to receive up to an additional 10% on the first $500.00 contributed annually in an RESP.

Alberta Centennial Education Savings Plan Grant (ACES)

A funding program launched by the government of Alberta.
For Family RESP plans, all children within the plan must be siblings in order to be entitled to receive ACES.
Under the ACES program, the Alberta government will contribute an initial amount of $500 to the RESP, for every baby born to an Alberta resident on or after January 1, 2005 as well as children adopted by Albertan parents.
The application for this grant must be submitted within 6 years following a child's birth (between date of birth and the day of the sixth birthday).
Subsequent grants of $100 are available to children enrolled in a school in Alberta at ages 8, 11 and 14 in 2005 or after.
To apply for the subsequent grant of $100.00, a contribution of at least $100.00 per beneficiary (in cases of family plans) must have been made to the RESP within one year immediately prior to applying for each subsequent ACES grants.
Separate applications for each of the 3 subsequent ACES grants must be submitted within 6 years following the child's 8th, 11th and 14th birthdays.


Assisted Contributions

Contributions made to RESP accounts that are eligible for government funding programs.


↑top

Basic Canada Education Savings Grant (CESG)

A government-funding program introduced on January 1, 1998, which subsidizes RESP plans with grant contributions. This program is administered and funded by Human Resources and Social Development Canada (HRSDC). HRSDC deposits the equivalent of 20% of the first $2500.00 contribution portion calculated annually to an RESP on a beneficiary's behalf.


↑top

Canada Child Tax Benefit (CCTB)

A tax-free monthly payment made by the government to eligible families to help them with the cost of raising children under age 18.


Canada Learning Bond (CLB)

A Government of Canada grant deposited directly into an RESP to help modest-income families start saving early for their child’s education.

A beneficiary is eligible to receive the Canada Learning Bond if:

  • He/she was born on January 1, 2004 or later and;
  • The monthly Canada Child Tax Benefit (CCTB) payment includes the National Child Benefit Supplement (NCBS).

For families that qualify, the Government will make a first payment of $500 to a child’s RESP. Families that receive the CLB will also get extra payments of $100 a year for up to 15 years, as long as they receive the National Child Benefit Supplement.The government will also deposit an amount of $25.00 along with the initial $500.00 bond to help cover the cost of opening an RESP. This $25 is considered income for MFC RESPs since MFC does not charge set-up fees.


CESG Claw-Back

Part or all of the CES Grant that was credited to a plan that has to be reimbursed to Human Resources and Social Development Canada (HRSDC) if the RESP money is redeemed for non-educational purposes.


CUSTODIAL PARENT/LEGAL GUARDIAN

An individual, department, agency, or institution that has the legal right to make decisions affecting a child’s interests, and the responsibility of taking care of the child.


↑top

Educational Assistance Payment (EAP)

Redemption of grant and growth used to finance the post-secondary education of the beneficiary (or beneficiaries) on an RESP plan.


↑top

Family RESP

This plan allows for multiple beneficiaries to be named on the account. Every beneficiary must be blood related to the subscriber(s), but they do not need to be directly related to each other. The subscriber(s) can be a parent(s), a grandparent(s) or great-grandparent(s).


↑top

Grandfathered RESP Plans

This plan type identifies all RESP's that were opened prior to the implementation of the Basic CES Grant program introduced in 1998.

RESP subscribers can continue to hold the account, but no longer can make contributions or transfer money into them.


↑top

Individual RESP

This plan allows for only one beneficiary to be named on the account. Anyone can become a subscriber on an individual RESP. The subscriber does not need to be related to the beneficiary.


↑top

The National Child Benefit (NCB)

A monthly benefit for low-income families with children. NCB is a part of CCTB.


↑top

Post-Secondary Education Capital Redemption (PSE)

Redemption of the principal component used to finance the post-secondary education of the beneficiary (or beneficiaries).


PRIMARY CAREGIVER (PCG)

The individual who receives the Canada Child Tax Benefit (CCTB), or the department, agency or institution that receives a special allowance payable under the Children’s Special Allowances Act.


Promoter

The financial institution that administers an RESP plan (i.e. Mackenzie Financial Corporation)


Proof of Enrolment

Validation that a student is enrolled in a qualifying educational program to qualify for EAP or PSE RESP redemption.


↑top

Qualified Educational Institution

Recognized educational institutions for the purpose of EAP redemptions.

To verify if a Canadian institution is qualified, please contact Human Resources and Skills Development Canada @ 1-866-517-5650 or 613-947-3131 or at www.canlearn.ca

For international schools, clients can contact their local tax office or the CRA General Inquiries line at 1-800-959-8281 (English) or 1-800-267-5565 (French).


Qualifying Educational Program

A course of study that lasts at least three weeks in a row, with at least 10 hours of instruction or work each week. A program at a foreign educational institution must last at least 13 weeks. Qualifying educational programs include apprenticeships and programs offered by a trade school, college or university.


↑top

RESP Beneficiary

The individual(s) named by an RESP subscriber that is designated to use RESP redemption proceeds for financing their post-secondary education. The beneficiary must have a social insurance number in order to have an RESP opened.


RESP contributions

The deposit of new money into an RESP.
Contributions make up the principal portion of an RESP. All assets contributed to an RESP remains the property of the subscriber until he/she gives it to the beneficiary in form of EAP or PSE redemption.
Subscribers cannot claim RESP contributions as deductions for income tax purposes.


RESP Growth

The growth on investment in an RESP, which is comprised of:

  1. Growth on the principal invested;
  2. Growth on the CESG

RESP Principal

Money that is contributed into an RESP plan and it is not comprised of any growth on investment or grant.


RESP (Registered Education Savings Plan)

A savings vehicle generally used by parents to save for their children's post-secondary education.


RESP Subscriber

The individual(s) who opens, administers and contribute money to an RESP for beneficiaries' post-secondary education.

The subscriber must be a person and must provide a social insurance number when opening the account.


↑top

SIBLINGS ON A FAMILY RESP

Brothers and sisters including half-brothers, half-sisters, adopted children and stepchildren.


↑top

Unassisted Contributions

Contributions made to RESP plans that are not eligible to receive CESG.


↑top