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Canada Education Savings Program - RESP Provider User Guide

RESP Provider User Guide

1.0 Introduction

2.0 Education Savings Incentives

3.0 Transfers and Payments

4.0 Appendices

Chapter 2-2: The Basic and Additional Canada Education Savings Grant (CESG)

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The Canada Education Savings Grant (CESG) is an education savings incentive administered by the Canada Education Savings Program (CESP), Human Resources and Skills Development Canada (HRSDC).

Registered Education Savings Plan (RESP) Promoters must be authorized by HRSDC to offer the CESG or any other HRSDC education savings incentive.

The CESG is based on contributions made to an RESP in respect of an eligible beneficiary and is comprised of two components:

  • The Basic CESG
  • The Additional CESG

1. The Basic and Additional CESG - An Overview

Basic CESG is a payment of 20% on RESP contributions made on or after January 1, 1998, in respect of an eligible beneficiary, up until the end of the calendar year in which the beneficiary turns 17. The amount of annual Basic CESG payable per beneficiary is limited to the lesser of the following two amounts:

  • Accumulated grant room available for the beneficiary, or
  • Basic CESG Annual Limit

For information about accumulated grant room, see 3. Annual CESG Limits and Grant Room, later in this chapter.

Period Basic CESG
Annual Limit		 Contribution Required for
Basic CESG Annual Limit
1998 to 2006 $800 (20% of $4,000) $4,000
2007 or later $1,000 (20% of $5,000) $5,000

For example…

  • $2,500 annual contributions x 20% = $500 CESG

Additional CESG is a payment (over and above the Basic CESG amount) of either 10% or 20% on the first $500 or less of annual RESP contributions made on or after January 1, 2005, in respect of an eligible beneficiary, up until the end of the calendar year in which the beneficiary turns 17.

The percentage of Additional CESG paid is based on the adjusted family net income of the beneficiary's primary caregiver and is determined as follows:

Adjusted family net income (2012 Income Levels; indexed yearly) Additional CESG Rate
$42,707 * or less 20%
More than $42,707 but not more than $85,414 10%
More than $85,414 Beneficiary is not eligible

The maximum annual 10% Additional CESG payment is $50 per child.

  • $500 annual contributions x 10% = $50 Additional CESG

The maximum annual 20% Additional CESG payment is $100 per child.

  • $500 annual contributions x 20% = $100 Additional CESG

1.1. How it Works

The payment of the Canada Education Savings Grant (CESG) is based on the following requirements:

  • A Registered Education Savings Plan (RESP). A subscriber must meet with a participating RESP Promoter, open an RESP, and name an eligible beneficiary.
  • RESP Contributions. The subscriber makes contributions to the RESP. Over the years, savings and earnings will grow.
  • Eligibility criteria. The subscriber and participating RESP Promoter ensure that all eligibility criteria for the grant have been met.
  • Application Process. The subscriber requests a participating RESP Promoter to apply for the CESG on their behalf. See 8. Applying for the Basic and Additional CESG, later in this chapter.

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Date Modified:
2011-12-29