|
|
When contributing to an RESP whose beneficiary is under 18, he/she is entitled to the federal government’s Canada Education Savings Grant (CESG).
For the first $500 invested in a child’s RESP, the CESG works out to:
 | 40 cents per dollar invested, if the net family income of the child’s caregiver is $37,178* or less;
|
| 30 cents per dollar invested, if the net family income of the child’s caregiver is between $37,178* and $74,357*;
|
| 20 cents per dollar invested, if the net family income of the child’s caregiver is more than $74,357*; |
*For 2007. These income brackets are revised annually.
Regardless of the net family income of the child’s caregiver, if you invest more than $500, the CESG amounts to 20 cents on each additional dollar invested, based on a maximum contribution of $2,500 per year. The maximum cumulative grant is $7,200 per beneficiary.
The child’s caregiver is the recipient of the National Child Benefit (also called the family allowance in Québec), usually the mother.
The net family income of the child’s caregiver is his/her net income plus the net income of his/her spouse or common-law partner, if applicable. This is the amount reported on line 236 of the caregiver’s federal tax return. You are not required to provide this information; the government will determine the child’s eligibility.
For example, here is what will represent the CESG on your annual contributions if the net family income of the child’s primary caregiver is of $55,000.
|
