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Accumulated Income Payment (AIP)
Removing the growth (earnings) portion from an RESP for non-educational purposes. If the subscribers meet all 4 AIP conditions, they may redeem the growth, transfer it into an RRSP in the subscriber’s name or donate it to a Canadian education institution.
Additional Canada Education Savings Grant (CESG)
A funding program that supplements the existing Basic CESG 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.
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 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 have received government funding under the Canadian Education Savings Program.
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 of annual contributions to an RESP on a beneficiary's behalf.
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 a beneficiary’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 HRSDC will make a first payment of $500 to a beneficiary’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 HRSDC will also deposit an amount of $25.00 along with the initial $500.00 bond to help cover the cost of opening an RESP. As Mackenzie does not charge such administration fees, this $25.00 will be deposited into the beneficiary’s RESP.
CESG Claw-Back
Part or all of the CESG 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.
Educational Assistance Payment (EAP)
Redemption of grant and growth used to finance the post-secondary education of a beneficiary on an RESP plan.
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 blood related to each other. The subscriber(s) can be a parent(s), a grandparent(s) or great-grandparent(s).
Grandfathered RESP Plans
This plan type identifies all RESP's that were opened prior to the implementation of the Basic CESG program introduced in 1998.
RESP subscribers can continue to hold the account, but no longer can make contributions or transfer money into them.
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.
The National Child Benefit Supplement (NCBS)
A monthly benefit for low-income families. The NCBS is part of the Canada Child Tax Benefit (CCTB).
Post Secondary Education (PSE) Redemption
Redemption of the principal component used to finance the post-secondary education of the beneficiary.
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 Enrollment
Documentation verifying that a student is enrolled in a qualifying educational program in order to receive an EAP or PSE withdrawal.
Qualified Educational Institution
Educational institutions recognized as valid for EAP or PSE withdrawals.
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 each week. A program at a foreign educational institution must last at least 13 weeks. Qualifying educational programs include many apprenticeships and most programs offered by trade schools, colleges or universities.
Quebec Education Savings Incentive (QESI)
The Québec education savings incentive (QESI) is a tax measure that encourages Québec families to start saving early for the education of their children and grandchildren. The incentive, which went into effect on February 21, 2007, consists of a refundable tax credit that is paid directly into a registered education savings plan (RESP) opened with a financial institution or with another RESP provider that offers the QESI.
RESP Beneficiary
An individual named by an RESP subscriber that is designated to attract CESG to be used for financing their post-secondary education.
RESP contributions
Money deposited into an RESP by a subscriber for the purposes of funding a beneficiary’s post-secondary education. RESP contributions may attract CESG however are not deductable from the subscriber’s taxable income.
RESP Growth
The growth on investment in an RESP, which is comprised of:
- Growth on the principal invested;
- Growth on the CESG
RESP Principal
Money that is contributed into an RESP plan and does not include CESG or 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 contributes to an RESP for a beneficiary's post-secondary education.
The subscriber must be a person and must provide a social insurance number when opening the account.
Siblings On A Family RESP
Brothers and sisters including half-brothers, half-sisters, adopted children and stepchildren.
Unassisted Contributions
Contributions made to RESP plans that are not eligible to receive CESG.
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