[HaroldCrump]

Greetings,

I have recently opened a Family Plan RESP A/C (no money deposited yet).
My kids are 5 and 3.
No RESP done for them so far.

My question - is it possible to make up lost CESG grant from previous years (4 yrs. and 2 yrs. "lost" respectively).
Max grant per year is $500 on a contribution of $2,500.

I have received two different answers.
One answer is that if I contribute $5,000 per child every year from now onwards, I will receive $1,000 grant per child i.e. $500 for this year + $500 for previous year.
That way, the missed grants will be made up in 4 years for one child and 2 years for second child.

The other answer I got is that since the account has been opened this year, there is no way to recover lost grants.
Had the account been opened as soon as the kids were born but no contributions made, then the grants could have been recovered.

Can anyone shed any light?

-Harold

 

[SlightlyMad]

It's Buried On A Government Page ...

http://www.canlearn.ca/eng/saving/cesg/faq.shtml

6. How much unused grant room can I carry forward?

You can catch up on unused grant room from previous years by contributing up to $5,000 per child per year. (Remember that it's not the years that count here, but the total unused grant room.) The Canada Education Savings Grant provides $500 on the first $2,500 of contributions for the current year in which the contribution is made. The remaining $2,500 gains $500 in grant money from previous years. This way, you can get up to $1,000 in grant money per calendar year.

As of 2007, the lifetime contribution limit for an RESP was raised to $50,000. The Canada Education Savings Grant applies to the first $2,500 of contributions, so grant room of $500 is added yearly for each eligible child since 2007 (or since birth if the child was born after 2007, or the date the child became a Canadian resident, whichever is later). The maximum lifetime grant is still $7,200 per child.

Between 1998 and 2006, the lifetime contribution limit was $42,000 and the annual contribution limit was $4,000. During that time, the government's financial incentives for the Canada Education Savings grant applied to the first $2,000 of contributions. The annual grant room was $400 for every child eligible since 1998 (or since birth if the child was born after 1998, or the date the child became a Canadian resident, whichever was later).

Hope this helps.

 

[HaroldCrump]

You can catch up on unused grant room from previous years by contributing up to $5,000 per child per year. (Remember that it's not the years that count here, but the total unused grant room.) The Canada Education Savings Grant provides $500 on the first $2,500 of contributions for the current year in which the contribution is made. The remaining $2,500 gains $500 in grant money from previous years. This way, you can get up to $1,000 in grant money per calendar year.

So the first answer appears to be correct?
Am I reading this correctly?

 

[George]

So the first answer appears to be correct?
Am I reading this correctly?

Yes. You can contribute $5000 per child per year, and get $1000 in grant money each year, until you've "caught up".

 

[AdamW]

RESP Catch Up

My question - is it possible to make up lost CESG grant from previous years (4 yrs. and 2 yrs. "lost" respectively).
Max grant per year is $500 on a contribution of $2,500.

You can catch up on the lost room just make sure to specify this to the financial advisor / institution. The Government usually automatically pays a the grant 1 month after your contribution is reported but the institution needs to let them know that you want to apply for back grants as well.

 

[HaroldCrump]

Yes. You can contribute $5000 per child per year, and get $1000 in grant money each year, until you've "caught up".

So essentially a child begins accumulating grant room from the year of birth, regardless of when an RESP account is actually opened?

 

[George]

So essentially a child begins accumulating grant room from the year of birth, regardless of when an RESP account is actually opened?

Yes, up to the lifetime maximum of $7200 per child. Because the catch-up amount is limited, though, it's not possible to get the full $7200 if you start the RESP after the child is age 11 or so. Conversely, if you start the RESP at birth and contribute $2500 per year (to get the maximum $500/year grant), the grant will have been "maxed out" before the child's 15th birthday.