Are you looking for ways to maximize your child’s RESP grants? In this article we’ll look at how the latest Canada Child Benefit (CCB) boost payments can be used for just that. We’ll show you how you can efficiently invest in your child’s future, by making contributions that attract grant money (CESG), and how using your CCB can help with this.
The Canada Child Benefit (CCB) is a tax-free monthly government payment administered by Canada Revenue Agency (CRA) that eligible parents receive for their children. It’s to help with the costs related to raising children under 18 years old. The amount you receive as a parent depends on how many children you have and your household income.
The CCB is aimed at helping low and middle-income families. The CCB may also include the child disability benefit and payments from related provincial or territorial programs. If you’re eligible, you must apply to receive the CCB.
If you’re a parent with young children who has had your household budget affected by COVID-19, you’re not alone. To help with the unexpected expenses from the pandemic, the government recently announced an additional payment called the CCBYCS (CCB Young Child Supplement). The CCBYCS is meant to help with expenses such as clothing, food and fun family activities at home.
If you’re eligible for the CCBYCS, you could receive up to $1,200 in additional support per child under six years old in 2021. It’s estimated that the CCBYCS will help approximately 1.6 million families and about 2.1 million children under six years old in Canada.
If you’re a family receiving the CCB, with a net income of $120,000 or less, you can expect to receive four payments of $300 each, for a total of $1,200, for each child under six years old. As long as you filed your 2019 and 2020 income tax, you shouldn’t have to take any further action to receive the money.
If you’re a parent who is looking to efficiently invest in your child’s future, then maximizing the grant money available for education is the best way to do it.
With RESPs, the Canada Education Savings Grant (CESG) provides an additional 20 percent to contributions each year, with an annual payout of $500 and a lifetime maximum payout of $7,200. To maximize the annual $500, parents must contribute at least $208.33 per month, which for many parents, can be a lot.
However, did you know that you can use the payments you receive as a parent from the CCB and re-invest that into your children’s RESP? That’s right, you can do that. And now that the government is offering additional payments, parents have an even larger incentive to save in an RESP.
Now you don’t necessarily have to use your CCB and CCBYCS payments to invest in your child’s RESP, because that’s totally up to you. However, this is a good reminder that using your CCB payment at any amount you’re comfortable with, can provide a brighter future for your child.