Canada Education Savings Grant (CESG)

Human Resources and Social Development Canada pays a 20% Canada Education Savings Grant on the first $2,500 of annual contributions made to all eligible RESPs for a qualifying beneficiary.

Starting in January 2005, the CESG rate increased on the first $500 contributed to an RESP for a beneficiary who is a child under 18 years of age. The CESG rate has increased to:

• 40% if the child's family has qualifying net income for the year of $37,178* or less;
  
• 30% if the child's family has qualifying net income for the year in excess of $37,178* but not exceeding $74,357*.

The qualifying net income of the child's family for a year will generally be the same as the one used to determine eligibility for the Canada Child Tax Benefit (CCTB).

All other RESP contributions eligible for the CESG will continue to qualify at the rate of 20%.

Beneficiaries qualify for a grant on the contributions made on their behalf before the end of the calendar year in which they turn 17 years of age. However, special conditions must be met by the end of the calendar year in which the beneficiary turns 15. All CESGs are paid to the trustee of the RESP. The grants and accumulated earnings will be part of the educational assistance payments paid out of the plan to the beneficiary. The maximum CESG amount that a beneficiary can receive is $7,200.