Important Definitions for Registered Education Savings Plans (RESPs)

When opening an account for registered education savings plans (RESPs), you must be aware of the important words you’ll encounter throughout the program. In this article, we list down important words and definitions you must remember.

Subscriber
This refers to the person that generally makes contributions to the RESP. Subscriber are not allowed to deduct their contributions from their income on their income tax and benefit return.
With the exemption of family plans, there’s no restriction on who can be the subscriber.

This person can be:
• You and your wife/husband or common-law partner, in which case you are joint original subscribers.
• A public primary caregiver of a beneficiary. This person/entity is the one entitled to a special allowance under the Children’s Special Allowances Act.
Public Primary Caregiver
A public primary caregiver is the one who receives special allowances (as mentioned above) and may be the department, institution, or agency that looks after the beneficiary.

Promoter
This is usually the RESP provider. The promoter pays the contribution as well as the income gained from those contributions to the beneficiary.

Beneficiary/Beneficiaries
These are the receivers of the contributions and the educational assistance payments (EAPs) from the promoter. The beneficiary has to include the EAPs on their income when they file taxes for the year in during which they receive such payments.

Qualifying Educational Program
A qualifying educational program is a post-secondary school level program that lasts for at least three consecutive weeks. It also must require the student (beneficiary) to spend at least 10 hours each week on courses in the program.

Specified Education Program
A specified education program is also an educational program at post-secondary school level. This must last for at least three consecutive weeks and must require the student (beneficiary) to spend at least 12 hours each month on courses in the program.

Canada Education Savings Grants (CESGs)
Canada education savings grants (CESGs) are funds that the government of Canada deposits to an RESP. To avail this, you need to present the beneficiary’s Social insurance Number as well as other proofs that the child is pursuing post-secondary education.

Canada Learning Bonds (CLBs)
Canada Learning Bonds (CLBs) are another type of grants that the government deposits to the RESPs. CLBs can be received as long as the beneficiary is eligible and the RESP providers offer such grants. These are not dependent on the amount of contributions you make, but it’s more focused on your child’s eligibility.

Educational Assistance Payments (EAPs)
An educational assistance payment is the amount that the beneficiary may receive to help pay for the costs of post-secondary education. CESGs and CLBs fall under this category.

Post-Secondary Educational Institution
A post-secondary educational institution can be any college, university, or other Canadian educational institutions.

It can also be:
• A Canadian educational institution that is certified by the Employment and Social Development Canada (ESDC) as offering non-credit courses for a student’s occupational skills development.
• A university or college outside Canada that offers courses at post-secondary school level. The student must be enrolled in course that lasts not less than 13 consecutive weeks.

Leave a Reply

Your email address will not be published. Required fields are marked *

9 − 2 =