According to the Canada Revenue Agency, families are able to participate in a program called Registered Education Savings Plan (RESP) It is designed to help provide money for a person’s education. Participants in this program are able to make contributions on behalf of a beneficiary to a post-secondary institution. Ask for specialists at www.heritageeducationfunds.net. The contributions are usually made by an original subscriber.
An original subscriber can be various people or organizations. An original subscriber can be a parent or common-law partner. They can be joint subscribers. A public primary caregiver can be an original subscriber. A governmental department or agency providing care for a beneficiary can also be an original subscriber. This can also be done by a public trustee or public curator and more.
An RESP can receive contributions for 31 years after it is initially opened. At this time, it is possible to transfer the funds from more than one RESP into one plan. When this is done, the funds will expire upon the completion of the 35th year from when the plan was initially opened.
The Canada Revenue Agency will register the education savings plan. If a family is participating in the RESP with more than one child, the contributions have to be tracked for each individual child. The amount of the contributions don’t have to be the same. Group plan contributions must be tracked for each individual group. The RESP provider will provide credit for the amount of funds put into each RESP.
Educational Assistance Payment
Once the beneficiary is attending a post-secondary institution, they can then get the contributions in the form of educational assistance payment (EAP). There is a chance a beneficiary may not want the EAPs. It’s possible they don’t want to be responsible for the income or don’t plan to attend a post-secondary institution. In this case, the contributor will get back the entire RESP funds without any tax consequences.
This is when the total amount of contributions made for a beneficiary of the RESP is more than the limit of $50,000 for a lifetime. This is an over-contribution. It can decrease the amount of the Canada Education Savings Grant (CESG) received. If money is taken from the RESP, it will also decrease the amount of the CESG a person receives. There are a few exceptions.