You barely have time to blink – and before you know it, your baby has grown up. As life happens and new priorities take over, many parents come to realize that they will now have to pitch in to finance their child’s postsecondary education and maximize the potential of their education savings.
But what about government grants that have gone unclaimed in previous years? We have good news: it’s possible to catch up on RESP grants and obtain the significant financial boost to which your child is entitled.
RESP grant catch-up
- Unused grants are considered entitlements that can be recovered.
- Catch-up is limited to the equivalent of one year at a time. You can therefore contribute up to $5,000 per year and receive $1,500 in grants, rather than the annual maximum of $2,500 in contributions and $750 in grants.
- Certain conditions must have been met by the end of the year in which the child turns 15 in order to maintain eligibility for the CESG and QESI until age 17.
- For its part, the CLB allows you to recover grants retroactively until age 20.
What is the RESP grant catch-up provision?
The RESP grant catch-up provision allows you to recover unused amounts from previous years by increasing your annual contribution. Did you open your child’s RESP a few years after they were born, or have you sometimes not contributed the annual maximum of $2,500 to receive all available grants? You can add the catch-up contribution to your savings strategy at any time.
In practical terms, this means contributing up to $5,000 in a single year: $2,500 for the current year and $2,500 to make up for a past year – to a maximum of $36,000 in grant-eligible contributions per child.
Grants at a glance
In Canada, the federal government offers two grants: the Canada Education Savings Grant (CESG) for everyone and the Canada Learning Bond (CLB) for families who meet the financial eligibility requirements. In Quebec, the government offers the Quebec Education Savings Incentive (QESI) to families within the province.
| CESG | QESI | CLB | |
|---|---|---|---|
| Grant rate | 20 to 40% | 10 to 20% | No contribution required |
| Annual maximum | $500.
An additional $50 or $100 may apply to eligible families. |
$250.
An additional $25 or $50 may apply to eligible families. |
$500 in the first year of eligibility, then $100 for each additional year |
| Entitlement catch-up | Up to an additional $500 per year | Up to an additional $250 per year | No limit |
| Lifetime maximum per child | $7,200 | $3,600 | $2,000 |
| Limit | Until December 31 of the year the child turns 17.* | Until December 31 of the year the child turns 17.* | Before the child’s 18th birthday.** |
| *To receive the grant at age 16 or 17, by the end of the year in which the child turns 15. by the end of the year in which the child turns 15.
**The CLB can also be deposited retroactively into the RESP of a young adult aged 18, 19 or 20 who applies for it. |
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In summary, the following amounts represent the lifetime limits applicable to each child under an RESP:
- RESP contribution limit: $50,000 per child
- Limit on contributions eligible for grants (CESG and QESI): $36,000 per child
- Maximum grants available (including the CLB): $12,800 per child in Quebec ($9,200 per child in New Brunswick)
For more information, see our section dedicated to government grants available to families.
Every year of savings makes a difference to your budget
Starting early to save for your child’s education has a number of benefits. In addition to giving your savings more time to grow, you are able to spread the savings effort over a longer period and ease the strain on your budget.
If, however, diapers are already a thing of the past, the grant catch-up mechanism is there to help families manage their RESPs with greater flexibility.
Up to what age can you catch up on grants?
Before age 10: You still have access to all of your grants
If you open an RESP before your child turns four, you can maximize your grants without even having to use the catch-up provision. But thanks to the catch-up provision, you can also start saving for your child’s education as late as December 31 of the year they turn 10 and take full advantage of all entitlements. The difference is most apparent in the amount that needs to be saved each month to reach the goal of $36,000 in grant-eligible contributions.
| Age when the RESP is opened | At birth | 5 years old | 10 years |
|---|---|---|---|
| Average annual contributions | $2,000 | $2,770 | $4,500 |
| Monthly equivalent | $167 | $231 | $375 |
| Savings period | 18 years | 10 years | 8 years |
| Total | $36,000 | $36,010 | $36,000 |
Between 11 and 15 years of age: Part of your grants can no longer be recovered
Beginning at age 11, you start to forfeit some of the grants if you have not yet begun saving in an RESP. It is important to know that you have until December 31 of the year your child turns 15 to have made contributions of at least $100 per year for four years or at least $2,000, thereby maintaining your eligibility for grants until the end of the year the child turns 17.
In almost all cases, it is still worthwhile opening an RESP for your teen.
At ages 16 and 17: Last chance if you are still eligible
You can still receive up to $1,500 in basic grants per year through catch-up contributions if you meet the conditions of the 16- and 17-year-old rule. However, if you have not yet opened an RESP for your teen, they are unfortunately no longer eligible for the CESG or QESI.
On the other hand, it is still possible to receive the CLB if your family was financially eligible from the time your child was born until they turned 15. You can apply for this retroactive payment of up to $2,000 before your child turns 18. Otherwise, they can apply for it before turning 21.
Up to what age can you claim RESP grants?
| Age | Situation |
|---|---|
| 0 to 10 years | You can catch up on all grants. |
| Ages 11 to 15 | Some of the grants may already have been forfeited. |
| Ages 16 and 17 | If an RESP is already open: still eligible, subject to certain conditions.
Otherwise, eligibility for the CESG and QESI ends. |
| Ages 18 and older | No longer eligible for the CESG and QESI.
The CLB may be claimed retroactively before age 21. |
How does the RESP grant catch-up provision work?
The catch-up mechanism works very simply and entails just two steps.
Step 1: Confirm your child’s eligibility
The CESG is available to all Canadian families, while the QESI is offered only to Quebec families. Your child is eligible for grants as soon as they have a Social Insurance Number (SIN) and a Registered Education Savings Plan (RESP).
You can receive both of these grants until December 31 of the year your beneficiary turns 17. However, certain rules must have been followed before December 31 of the year they turn 15 to remain eligible. This means that confirming their eligibility is essential in the case of a teenager.
Step 2: Increase your savings rate
Once your eligibility has been confirmed, you must open an RESP – if you have not already done so – and contribute $2,500 to maximize the grant for the current year. You can then contribute up to $2,500 more to catch up on unused grant entitlements, one year at a time.
You don’t have to do anything else because we take care of the grant applications for you! They will be paid directly into your account.
How can you properly incorporate RESP grant catch-up into your strategy?
Although the RESP grant catch-up process is simple, you still need to develop a sound strategy to make the most of it. It’s also important to consider the contributions paid to all RESPs opened in your child’s name when following the three steps indicated below.
1. Calculate your unused catch-up contribution room
Calculate the maximum contributions eligible for grants for the number of years since your child was born, and then the cumulative contributions to all of their RESPs. The difference between the two represents your accumulated unused contribution room.
$2,500 × (your child’s age) – Total contributions = Entitlements available for catch-up
If you need personal information about your RESPs and the grants you have accumulated, you can also contact the Canada Education Savings Program at 1‑888-276-3624.
2. Assess contributions based on your child’s age
If your child is 10 years old or younger, you still have time to open an RESP or catch up on the years when you did not contribute the maximum amount. Maximize your grants each year; then spread out your unused entitlements up to (and including) age 17 to lessen the impact on your budget.
Let’s look at Théo, age 7.
Théo’s parents have chosen to contribute $100 per month since his birth, for a total of $8,400 out of a possible $17,500 eligible for grants. They have therefore accumulated $9,100 in unused grant room.
To gradually catch up on these grants, they could increase their savings to $285 per month, or $3,420 per year ($2,500 in base contributions plus $920 in catch-up contributions), for approximately 10 years.
Thus, the lifetime grant limit of $36,000 will be reached at the end of his eligibility period, and Théo will have received all of the government grants to which he is entitled for financing his studies.
If your child is 11 years old or older, it is no longer possible to receive all of the grants. The goal, therefore, will be to contribute $5,000 per year, or $417 per month, to make the most of the coming years. This will allow you to claim the maximum CESG and QESI amounts for the current year, while also making up the equivalent of one missed year at a time.
3. Determine your contribution capacity
Catching up necessarily requires a greater financial commitment. Before you get started, assess your family budget to set a realistic amount. You might be able to contribute a larger amount one year thanks to an unexpected windfall, and scale back your contributions during a tighter year. You should make a point of reviewing your savings strategy regularly.
Why is catching up crucial during adolescence?
Postsecondary education is becoming increasingly expensive, and adolescence is often when this reality hits us hardest. Above all, there are only a few years left to reassess your savings strategy or even open an RESP for your teen.
A well-thought-out catch-up strategy can make a real difference in the savings available to finance your child’s growing ambitions.
Catching up on grants: Justine’s story
Justine, 13, is already considering studying science. Although her parents are extremely proud, they now realize that the $20 a month they have been depositing into her RESP since she was born will probably not be enough. This excellent habit will nevertheless have enabled them to accumulate $3,360 in contributions and $1,008 in grants by the end of the year, in addition to investment income.
However, Justine’s educational path will cost significantly more than that amount. Since her parents’ financial situation has improved in recent years, they can increase their savings contributions to take full advantage of the catch-up opportunity.
To maximize the available grants, her parents will now contribute $417 per month for four years, until the end of the year in which she turns 17.
| Initial strategy
$20/month Ages 0 to 13 |
Adjusted strategy
$417/month Ages 14 to 17 |
Total | |
|---|---|---|---|
| Contributions | $2,000 | $2,770 | $4,500 |
| Grants | $167 | $231 | $375 |
| Total | $30,384 | ||
Result: Justine will receive $7,008 in grants through her Educational Assistance Payments (EAPs) – including $3,000 through the catch-up provision – in addition to the compound interest earned in her RESP. This adjustment to the parents’ savings strategy required a greater financial commitment over several years, but it paid off handsomely.
A personalized strategy to go further
We frequently find ourselves saying that we should have started sooner. But thanks to the RESP grant catch-up provision, it’s often possible to obtain a significant financial boost to help fund a child’s education. Why not take advantage of it?
Every family has its own considerations and its own budget to work with. That is why a personalized strategy can be particularly useful. To create a plan tailored to your needs and circumstances, contact your Education Savings Advisor through your Kaleido Client space.
Because every child deserves to pursue their dreams, whatever they may be!
FAQ
Yes. Unused grant entitlements are carried forward and can be recovered by contributing up to $5,000 per year – $2,500 for the current year and $2,500 for one unused year. The RESP grant catch-up program allows you to catch up one year at a time, up to the maximum available.
The RESP catch-up program allows you to recover unused grant entitlements from previous years. Instead of the annual maximum of $2,500, you can contribute up to $5,000 in a single year: $2,500 for the current year and $2,500 for previous years.
Yes. However, if no other RESP has been opened for your teen, they will no longer be eligible to receive the Canada Education Savings Grant (CESG) or Quebec Education Savings Incentive (QESI). A financially eligible family can still claim the Canada Learning Bond (CLB) retroactively.
You must contribute $36,000 to an RESP to receive all of the grants for which you are eligible. However, there is an annual contribution limit of $2,500, with the option of adding another $2,500 to recover unused contribution room.
For the CESG and QESI, you have until December 31 of the year the child turns 17 to claim your grants. For the CLB, you have until age 20 to claim them retroactively.
You can catch up on unused RESP grants by contributing up to $5,000 per year – $2,500 for the current year and $2,500 for previous years. If your unused grant room exceeds this amount, you will need to spread the catch-up over several years in order to recover all entitlements.
To determine whether you can use a catch-up strategy and recover grants from past years, add up all the contributions made to your child’s RESPs, regardless of the provider. Then compare this total with the maximum contributions eligible for grants for the number of years that have elapsed, i.e., $2,500 per year. The difference between the two represents your accumulated unused contribution room.
