Planning For The Future…
Registered Education Savings plans (RESP)

A Registered Education Savings Plan (RESP) is a government – approved plan for the purpose of providing post-secondary education funding for a beneficiary. Income earned within the plan is not taxed until it is withdrawn.

A LaHave River Credit Union Registered Education Savings Plan is the smart way to save for your family’s future.

A post-secondary education is critical in an increasingly competitive job market. Each year, fewer high school graduates are in a position to afford to continue their education. With the costs of higher education increasing almost every year, early planning is essential.

It will cost an estimated $112,700 to receive a university education in the year 2018. Compare this amount to:

  • 1962 Average cost of $6894
  • 1998 Average cost of $60,842

RESPs

Prepare for your children’s pursuit of a higher education. Plan for their future now!

Types of RESPs

  • Individual Plan – only one beneficiary – no relationship requirement with subscriber(s).
  • Family Plan – one or more beneficiaries – each beneficiary must be connected to each
    subscriber by blood relationship (as defined in the Income Tax Act) or adoption.

Beneficiary

  • Individuals must have a Social Insurance Number and be a Canadian resident.
  • In an Individual Plan, can be anyone, including the subscriber.
  • In a Family Plan, each beneficiary must be connected to each subscriber by blood relationship or adoption and must be under 21 when the plan is entered into.

Only certain beneficiaries are eligible to replace another beneficiary in a Family Plan. The same rules apply to the Individual Plan in order to avoid tax and CESG implications

Subscriber

  • Can be joint with spouse/common-law partner.
  • Must have a Social Insurance Number.
  • In an Individual Plan, can be anyone, including the beneficiary.

In a Family Plan, each subscriber must be connected to each beneficiary by blood relationship or adoption

Contributions

  • Maximum annual contribution has been removed.
  • Lifetime maximum contributions to all RESPs per beneficiary is $50,000.00 (excess contributions are not permitted and subject to penalty).
  • Contributions are not tax deductible however earnings are tax sheltered until withdrawn.

 

Canada Education Savings Grant

GET MONEY NOW

 

To help you save for your child’s education after high school, the Government of Canada will add to your savings in a Registered Education Savings Plan (RESP) with a Canada Education Savings Grant (CESG).

 

The grant is paid directly into your child’s RESP.

 

To date, three million children have benefited from Canada Education Savings Grants.

 

Eligibility for the CESG

  • Children up to and including the age of 17 are eligible to receive the CESG based on the following conditio The child is a Canadian resident;
  • The child has a valid Social Insurance Number (SIN);
  • The child is named as a beneficiary of an RESP; and
  • Money has been put into the RESP.

For children 15 years old and older, prior RESP contributions must have been made before December 31 of the year in which the child turns 15.

 

 

 

The Amount of the CESG

On the first $500 you save in your child’s RESP, the Canada Education Savings Grant will give you:

  • 40 cents per dollar, if your net family income is $37,885 or less.
  • 30 cents per dollar, if your net family income is between $37,885 and $75,769.
  • 20 cents per dollar, if your net family income is more than $75,769.

2008 income amounts shown – The family net income amounts are updated each year based on the rate of inflation.

 

No matter what your net family income is, when you save more than $500, the Canada Education Savings Grant will give you 20 cents for every extra dollar, up to a maximum of $1,100 per year.

 

Steps to Getting the CESG

 

To get the CESG, all you need to do is:

  • Apply for a Social Insurance Number (SIN) for your child. There is no fee to get one, however, certain documents are required. Contact 1 800 O-CANADA for more information or visit a Service Canada centre near you.
  • Apply to the Canada Revenue Agency for the Canada Child Tax Benefit (CCTB), if your family net income is $75,769 or less. This form is generally provided at the hospital where your child was born.
  • Open an RESP for a child at LaHave River Credit Union
  • Put some money in your RESP.
  • Ask LaHave River Credit Union to apply for the CESG on behalf of the child.
  • The grant money will be deposited directly into your child’s RESP.

Lifetime CESG Limits

 

The most CESG your child can receive is $7,200. This lifetime limit also applies to each individual child when the CESG money is shared with other beneficiaries as in a family RESP.

 

In this case, “lifetime” means from birth up to the end of the year that the child turns 17 years old.

 

Using the CESG

 

As soon as your child is enrolled in a qualifying educational program, he or she can start receiving money from the RESP. At that time, the CESG along with income earned by the money in the RESP is paid to the beneficiary as an Educational Assistance Payments (EAPs). Each EAP includes a specific amount of the CESG.

 

If your child does not go on to education after high school, the CESG must be returned to the Government of Canada, unless the RESP is a family plan. If the RESP is a family plan, the CESG may be used by another eligible child named in the plan. That child may use an amount of the CESG up to his or her lifetime limit as described above.

Canada Learning Bond

 

ACT NOW AND GET $500 FOR YOUR CHILD

 

The Canada Learning Bond (CLB) is a Government of Canada grant to help modest-income families start saving early for their child’s education after high school.

 

The Canada Learning Bond is put directly into an RESP in which the child is named as a beneficiary.

 

Eligibility for the CLB

 

You can get the Canada Learning Bond if:

 

*The supplement is generally for families with a net annual income below $37,887*.

 

The Amount of the CLB

 

For families who qualify, the Government will add to a child’s RESP by making a first payment of $500. Families that receive the Canada Learning Bond will also get extra payments of $100 a year up to the child’s age of 15 years, as long as they receive the National Child Benefit Supplement.

 

An additional $25 will be paid with the first $500 bond to help cover the cost of opening an RESP.

 

Lifetime CLB Limit

 

The total CLB available for a child could amount to $2,000.

 

Using the CLB

 

As soon as a child named in an RESP is enrolled in a qualifying educational program, he or she can start receiving money. At that time, the CLB along with the CESG (if any) and income earned by the money in the RESP is paid to the beneficiary as Educational Assistance Payments (EAPs). Each EAP includes a specific amount of the CLB.

 

If the child named in an RESP does not continue education after high school, the CLB must be returned to the Government of Canada. The CLB cannot be used by another child.

 

Steps to Getting the CLB

 

To get the CLB, all you need to do is to:

 

  • · Apply for a Social Insurance Number (SIN) for your child. There is no fee to get one, however, certain documents are required. Contact 1 800 O-CANADA for more information or visit a Service Canada centre near you.
  • · Apply to the Canada Revenue Agency for the Canada Child Tax Benefit.
  • · Open an RESP for a child at LaHave River Credit Union
  • · LaHave River Credit Union will apply for the CLB on your behalf.
  • · The grant money will be deposited directly into the RESP.

 

The Alberta Centennial Education Savings Plan

 

The Alberta Centennial Education Savings Plan is designed to help Alberta parents start planning and saving for their children’s education after high school. Under the plan, the Government of Alberta will deposit $500 in a Registered Education Savings Plan (RESP) for every child born to, or adopted by, Alberta residents in 2005 and after. Additional grants of $100 will be available at ages 8, 11 and 14 for children attending school in Alberta.

 

Contact LaHave River Credit Union for information or questions.

Investment Options

  • New Plan – No minimum (Variable only)
  • Subsequent Lump Sum Deposits:
    - Fixed Term – $500.00
    - Variable Rate – $25.00 (For Biweekly or Monthly Electronic deposits)

www.advancededucation.gov.ab.ca/aces/

LaHave River Credit Union offers a variety of competitive options for RESP investments. You can choose one option or diversify your strategy with a variety of investments. LaHave River Credit Union offers convenient monthly deposits, which can make securing your child’s future more easily affordable.