Purchase as you go or set up a preauthorized contribution plan from the start
- The government allows up to $50,000 in contributions per beneficiary
- The government awards up to $7,200 in basic and additional CESG per beneficiary
- Beneficiaries will not be awarded grant on contributions made after December 31st of the year they turn 15 unless they meet this requirement:
Age 16 & 17 rule
A beneficiary turning 16 or older will not be eligible for grant unless:
They’ve received a minimum of $2,000 of contributions (that haven’t been withdrawn) before January 1st of the year they turn 16.
OR
They’ve received $100 of annual contributions (that haven’t been withdrawn) in any four years before Jan 1st of the year they turn 16.
Tip: Consider setting up a preauthorized contribution (PAC). It’s a low-maintenance way of ensuring you get the most out of your RESP.
Over-Contributions
When a subscriber contributes more than the $50,000 lifetime limit, they’re generally required to pay a 1% per month tax on their share of the over-contribution until it’s withdrawn.
Tip: If there are multiple beneficiaries in a family plan, talk to your advisor about updating allocation instructions before the beneficiaries turn 18.
More information
- Calculating CESG – find out how CESG is calculated
- CESG Limits – detailed information about applicable limits of CESG and ACESG
- Over-Contributions – information about over-contributions and withdrawals of over-contributions.