Written by: Kaleido
Did you know that the Government of Canada offers a grant to support post-secondary education for children from lower-income families? This educational assistance is paid directly into the RESP for financially eligible children. Although few people are familiar with or use it, the Canada Learning Bond (CLB) is a simple way to save so that children can develop their full potential.
The CLB is a government grant that helps low-income families support their children in their post-secondary education. It is paid directly into the recipient’s RESP and can be as much as $2,000 per child.1 Unlike the Canada Education Savings Grant (CESG), the CLB does not depend on how much you contribute to the RESP. To qualify for the grant, all you need to do is meet the eligibility criteria and open a registered education savings plan account on behalf of the eligible child. No personal contributions are required, and no sales charges apply.
652,885 recipients received the CLB in 2021.2 If this number seems high, you should know that this is only 42% of the eligible families in Canada. Are you one of the 58% of Canadian parents who are missing out on this government assistance?
The eligibility criteria for the CLB are based in part on adjusted family income and the number of eligible children in the family.
For a family of one to three children, the net family income must be less than $50,197. For a family of four children, the net family income must be less than $56,636. For the eligible income for families with five or more children, see the full table on the Government of Canada website.
The other eligibility criteria are as follows:
If you open an RESP for a grandchild, niece or nephew, he or she may qualify for the grant even if your income is high. CLB eligibility depends on the family income of the beneficiary child’s parents, not the income of the subscriber.
The Government of Canada contributes up to $2,000 to the RESP of a child eligible for the CLB. $500 is paid in the first year, and $100 is paid in each year of eligibility until the child reaches the age of 15.
Is your child over 15? You should know that it is possible to receive the CLB retroactively. You have until the day before the child’s 21st birthday to apply.
As soon as your child enrols in an eligible post-secondary program! That is when he/she can begin receiving educational assistance payments (EAPs), which consist of the government grants and the income accumulated in the RESP. To withdraw the CLB in the form of EAPs, the child must provide proof of enrolment in eligible full-time or part-time post-secondary education at a vocational institution, college or university. The federal government specifies the exact conditions in its article on using registered education savings plans.
If your child does not continue his/her education after high school, all or part of the amount you contributed to the RESP will be returned to you, and the CLB and other grants will be returned to the government.
To take advantage of the CLB and help fund your child’s post-secondary education without paying a single penny, follow these three steps:
Kaleido gives eligible families the opportunity to open an RESP just to receive the Canada Learning Bond. When you opt for a Kaleido RESP, we take care of applying for the CLB for you. Your representative will have you sign the required documents when the RESP is opened.
Kaleido offers the IDEO+ line of RESPs, which adapts to your budget and preferences. You can open an RESP without putting any money into it at the beginning. However, the first contribution made must be at least $10. You can then choose when you will make subsequent contributions.
The Kaleido team is available to help you apply for the Canada Learning Bond. Contact a representative to confirm your eligibility for the CLB and open an RESP.
If you have children, it’s never too early to start saving for their post-secondary education, especially if they qualify for the CLB, which will bring in $500 when an RESP is opened!
1. Canada Learning Bond (CLB), up to $2,000 per beneficiary, for a child born after December 31, 2003, whose family is financially eligible. Certain conditions apply. See our prospectus for details.