Canadians use RESPs, registered education savings plans, to save for the post-secondary education of their children. The RESP savings grow tax-free until the child is enrolled in a post-secondary education institution and can pay for part-time or full-time studies.
The Government of Canada administers two education savings incentives linked to RESPs.
There is the Canada education savings grant, which consists of a 20% grant on the first $2,500 in annual contributions and an additional grant amount of 10% or 20% for low- and middle-income families.
Then we have the Canada learning bond, which is available for children in low-income families who were born after 2004. It's a maximum of $2,000, with no personal contributions required.
Until June 2016, the CLB was payable for a beneficiary who receives the national child benefit supplement, the NCBS. The NCBS was based in part on the number of qualified children in a family and the adjusted family income. With the introduction of the CCB, the Canada child benefit, which replaced, among other benefits, the NCBS, an amendment to the eligibility requirement for the CLB is required.
The new eligibility requirements are very similar to those of the NCBS. More specifically, the new eligibility requirement is based also on the number of children in a qualified family as well as on the adjusted family income.
In support of this change, the Canada Education Savings Act is being amended to include the replacement of the term “child tax benefit” with “Canada child benefit”.