FAQs

Frequently Asked Questions for RESPs

FAQs


Everything you need to know about Knowledge First Financial, RESPs and how government grants in Canada work. Below is a list of answers to the most common questions we receive.  If you can't find the answer here, you can contact us by phone, email or live chat.
 
About Knowledge First Financial
What is Knowledge First Financial?
Knowledge First Financial is a leading provider of registered education savings plans (RESPs). At Knowledge First Financial, we are committed to inspiring students to realize life’s possibilities by enabling families to maximize their education savings through RESP Specialists. Since 1965, the company has paid $8.2 billion to customers and students. With $6.3 billion in assets under management*, we are Canada’s largest RESP Company with a sole focus on education savings. 
*As at December 31, 2019

What is the Knowledge First Financial Foundation?
Knowledge First Financial is a wholly-owned subsidiary of Knowledge First Foundation, a not-for-profit Canadian corporation. With no shareholders, the Foundation is able to reinvest net revenues in initiatives that support students. To date, the Foundation has supplemented payments to students by over $50 million and awarded $1.5 million in graduate scholarships.

About RESPs

What is a Registered Education Savings Plan (RESP)?
An RESP is an education savings plan registered under Canada's Income Tax Act, which is established for the purpose of providing financial assistance to a beneficiary (usually a child) when he or she pursues a post-secondary education. Income on the savings within an RESP is tax-sheltered until the child is ready for post-secondary education. The earnings are taxed in the hands of the student/beneficiary, who typically pays little to no tax. In addition, RESPs may qualify for various government grants that help parents, relatives and friends save for a child's post-secondary education. Subscribers and beneficiaries enrolled in an RESP must have a valid Social Insurance Number every time a contribution is made. A beneficiary must also be a Canadian resident when the RESP is opened and every time a contribution to an RESP is made.

I just had a baby. How do I open a new RESP?
One of the easiest ways to help fund your beneficiary's future post-secondary education is with an RESP. It's easy to get started and there are different ways to do so:

  • You can conveniently submit your request on-line by contacting us here.
  • You can call one of our sales representatives to discuss your education savings objectives.
  • Contact a Sales Representative in your area.
  • Alternatively, you may call our Customer Service Team toll-free at 1 800 363-7377. One of our Customer Service Representatives will then forward your contact information to a Sales Representative in your area.

Whichever way you contact us, we will help you set up a plan that suits your financial needs and meets your beneficiary's future post-secondary education savings objectives.

How can I increase* the value of my Registered Education Savings Plan?
For a child born in 2021, a  4-year undergraduate program at a Canadian university including expenses could cost over $130,000..** To prepare for the rising cost of education, many parents have decided to invest additional funds in an RESP for their children. You can do it too!

Contributing a little more today could make a big difference tomorrow. Your Sales Representative would be pleased to arrange a review of your education savings goals and advise you on how best to maximizie the grants available to you. 

You can also call our Customer Service Team toll-free at 1 800 363-7377 or contact us online.

* Increasing your contributions is subject to suitability and affordability guidelines. According to the Income Tax Act (Canada), the total RESP lifetime contribution limit is $50,000 per beneficiary. Any excess contributions will be subject to a 1% per month penalty tax. Government grants are not included for the purpose of calculating the amount of the lifetime contribution limit.

** *Projections based on Tuition Cost, 2020-2021 Preliminary (Statistics Canada). Weighted averages include public and private institutions. Compulsory fees cover items such as athletics, health services, and student association fees. Expenses include student tuition fees, books, shelter, food and transportation.


My friends have a child and want to start saving towards their child's future post-secondary education. Can I recommend Knowledge First?
Absolutely! Our business depends on people like you. We are interested in helping people who care about their children's future and who want to help them be successful in life. We encourage you to provide them with the contact information of your Sales Representative, or direct them to visit our website at www.knowledgefirstfinancial.ca.

Statement of Account
Federal CESG (Canada Education Savings Grant):

What is the Canada Education Savings Grant (CESG)?

Introduced in January 1998, the Canada Education Savings Grant (CESG) is a special financial incentive by the federal government for parents, family and friends to save for a child's education after high school. It provides people who invest in an RESP with a Basic Canada Education Savings Grant amount equal to 20% of yearly contributions, up to an annual maximum of $500 per eligible beneficiary, with a lifetime maximum of $7,200.

The A-CESG is intended to help families receive the $7,200 lifetime maximum sooner by providing an addition 10% or 20% on the first $2,500 contributed to your RESP. Eligibility is based on net family income.* 
 
For 2020, if your net family income is below $48,535*, the grant will be 40% for every dollar on the first $500 you save and 20% of the next $2,000 in your beneficiary's RESP each year. That means you could receive up to $600 in CESG per year.

If your net family income is between $48,535* and $98,208*, the grant will be 30% for every dollar on the first $500 you save and 20% of the next $2,000 in your beneficiary's RESP each year. That means you could receive up to $550 in CESG per year.

 
Canada Education Savings Grant (CESG)
Net Family Income1 $48,535 or less More than $48,535 to $97,208 Over $97,208
Basic CESG
Paid on first $2,500 of annual contribution
20% = $500 20% = $500 20% = $500
Additional CESG
Paid on first $500 of annual contribution
20% = $100 10% = $50 Nil
Annual Total 40% = $600 30% = $550 20% = $500
*Indexed annually.
*Primary caregiver is the person who is primarily responsible for the care and upbringing of a child.
 

How do I apply for a Canada Education Savings Grant (CESG*)?

To apply for a CESG follow these simple steps:

  1. Register the birth or adoption of the child.
  2. Apply for a birth certificate for the child.
  3. Apply for a Social Insurance Number (SIN) for the child. Please visit http://www.servicecanada.gc.ca/eng/sin/apply/how.shtml for more information on the SIN application process.
  4. Open a Registered Education Savings Plan (RESP) and make a deposit.
  5. Download the appropriate form for your CESG application:
    • If you are a parent and/or legal guardian and are contributing to your child's RESP, download form SDE 0093 E (The original form must be forwarded to the RESP promoter).
    • If you are a grandparent, aunt, uncle or non-relative and are contributing to a child's RESP, download form SDE 0093 E – Annex B (The original form must be forwarded to the RESP promoter).
    • Please note that this form must be sent along with the SDE 0093 E main form.


Are there any other CESG* provisions?
There is a special rule for older beneficiaries. In order to receive CESG* when the beneficiary is 16 or 17 years old, at least one of the following conditions must be met:

  • A minimum of $2,000 of contributions must be made and not withdrawn in any year before the beneficiary is 16 years old
  • A minimum of $100 of annual contributions must be made and not withdrawn in at least any four years before the year the beneficiary is 16 years old

* Certain conditions apply. See prospectus for full details

Canada Learning Bond (CLB*):

What is the Canada Learning Bond (CLB*)?

The Canada Learning Bond provides a one-time initial grant payment of $500 to an eligible beneficiary's Registered Education Savings Plan. The Government will automatically add $100 for each year of eligibility until your child is 15 years old. Over time, that could add up to as much as $2,000 in grant payments, plus interest. Eligibility is based on net family income and number of children.

The adjusted net family income levels and number of children required to qualify for the July 1, 2019 to June 30, 2020 benefit year are:
 

Number of children Adjusted net family income for the 2019-2020 benefit year
1 to 3 Less than or equal to $47,630
4 Less than $53,740
5 Less than $59,876
6 Less than $66,011

 




 

How do I apply for the Canada Learning Bond (CLB*)? 
To apply for the CLB follow these simple steps:

  1. Register the birth or adoption of the child.
  2. Apply for a birth certificate for the child.
  3. Apply for a Social Insurance Number (SIN) for the child. Please visit http://www.servicecanada.gc.ca/eng/sin/apply/how.shtml for more information on the SIN application process.
  4. Open a Registered Education Savings Plan (RESP). Contributions are not required to apply for the CLB
  5. Download the appropriate form for your CLB application:
  • If you are a parent and/or legal guardian and are contributing to your child's RESP, download form HRSDE 0093 E (The original form must be forwarded to the RESP promoter).
  • If you are a grandparent, aunt, uncle or non-relative and are contributing to a child's RESP, download form SDE 0093 E – Annex B (The original form must be forwarded to the RESP promoter).
  • Please note that this form must accompany the main form SDE 0093 E.

I did not apply for the Canada Learning Bond (CLB*) right away when I first opened my RESP. Am I too late? 
Not at all. Your beneficiary is eligible for the CLB commencing with the year of birth or the year your beneficiary became a Canadian resident. If you have not applied for the CLB right away, the Federal Government will still make payments for the previous years. All you need to do is to apply for the CLB.

How long do I have to apply for the Canada Learning Bond (CLB*)?  
You have up until your beneficiary turns 18 to apply for the Canada Learning Bond, but the earlier you apply, the sooner the grant money will start to grow in an RESP.

QUEBEC (QESI*):

What is the Quebec Education Savings Incentive (QESI*)?

The Government of Quebec introduced the Quebec Education Savings Incentive (QESI*) to further encourage Quebec families to save for their children's post-secondary education on February 2007. This incentive is paid in the form of a refundable tax credit by Revenu Québec into the Registered Education Savings Plan (RESP) of the beneficiary. The beneficiary must be a resident of Quebec. The QESI* is comprised of a basic and an increased credit and is subject to a lifetime maximum of $3,600 per beneficiary.

* Certain conditions apply. See prospectus for full details.

How do I apply for the Quebec Education Savings Incentive (QESI*)?

  1. Register the birth or adoption of the child.
  2. Apply for a birth certificate for the child.
  3. Apply for a Social Insurance Number (SIN) for your child. Please visit http://www.servicecanada.gc.ca/eng/sin/apply/how.shtml for more information on the SIN application process.
  4. Open a Registered Education Savings Plan (RESP) with an RESP provider such as Knowledge First Financial.

Once an RESP for your beneficiary is set up, Knowledge First will apply annually to Revenu Québec for the QESI* monies to be paid into your RESP. You are not required to fill out any paperwork or make an application for the QESI* on your income tax return.

* Certain conditions apply. See prospectus for full details.

BRITISH COLUMBIA (BCTESG*):

What is the British Columbia Training and Education Savings Grant (BCTESG*)? 

This grant is offered to each resident beneficiary born on or after January 1, 2007. After the beneficiary turns six years of age, the province of British Columbia will deposit $1,200 into the beneficiary's RESP. To qualify, the RESP must be opened prior to the day before the beneficiary's 9th birthday. No matching or additional contributions are required.

* Certain conditions apply. See prospectus for full details.

EDUCATIONAL ASSISTANCE PAYMENT(EAP):

What is an Educational Assistance Payment (EAP)?

An EAP is any amount paid or payable under an RESP to or for an individual, called the beneficiary, to assist with the individual's education expenses at the post-secondary school level. These amounts do not include refunds of contributions less fees contributed by subscriber(s) of the plan.

If my beneficiary will already be in the 2nd year of post-secondary studies when my plan matures, can I apply for the EAP at the same time as the Post-Secondary Education (PSE) withdrawal?
Yes, you can.

For the Heritage Plans, what is the deferral process of an EAP? How long can I defer? 
A deferral of the first EAP is available to the beneficiary if they are expected to be registered in the 2nd year of post-secondary studies later than the original eligibility date. The first EAP may be deferred for a maximum of 2 years, one year at a time, by August 15th of the Year of Eligibility (this is a year after the maturity date of the plan). Further deferrals may be granted to the beneficiary, under extenuating circumstances, at the discretion of the Heritage Educational Foundation (the Foundation). A letter of appeal from the beneficiary or subscriber along with original supporting documents will be required for submission to the Foundation prior to the deadline.

A deferral of the second or third EAP is available when the beneficiary is expected to be registered in 3rd or 4th year of post-secondary studies later than originally expected. There is only one deferral permissible of either the second or third EAP under the terms and regulations of the RESP Contract. Further deferrals may be granted to the beneficiary, under extenuating circumstances, at the discretion of the Foundation. A letter of appeal from the beneficiary or subscriber, along with supporting documents, will be required for submission to the Foundation prior to the deadline.

ONTARIO (OSAP):

If my beneficiary is applying for the Ontario Student Assistance Program (OSAP), do I have to claim my educational assistance payment on the OSAP application? 

If the beneficiary (student) is eligible to receive an EAP for the post-secondary school year, the approximate amount must be reported on the OSAP application as the beneficiary's income, since it will be reported on his/her taxes.

INDIAN STATUS:

What if my beneficiary has Native Indian status?

If the beneficiary's status is Native Indian, the RESP Contract is not affected when releasing funds for maturity and EAPs. The beneficiary will be required to complete the proper documents and submit the Proof of Registration in order to receive the payments, just like any other student. The only difference is that he/she may not be required to pay taxes for the EAP amounts received due to their status. You may obtain further clarification from Canada Revenue Agency regarding tax implications at: 1.800.959.8281.


 
Government Grants
How do I get money out for post-secondary education?
Now that your student has graduated high school and is headed off to post-secondary it’s time to put all those hard-earned savings to work. Make sure you are making the most of them with these tips on how to maximize the withdrawals.

There are two types of educational withdrawals:
 
  • PSE Contribution Withdrawal which consists of your net contributions (and Loyalty Bonus if you have a Flex First Plan). This money can be withdrawn tax-free.
  • Educational Assistance Payment (EAP) which consists of income earned on your contribution, government grants and income earned on grants. EAPs are considered taxable student income.
How do I know whether my student’s post-secondary program qualifies for an educational withdrawal?

Under the Income Tax Act, a qualified post-secondary program must be:
  • Minimum three consecutive weeks duration
  • 10 hours of instruction per week
  • Full or part-time
  • Recognized institution and program
A recognized institution is one that qualifies as a post-secondary educational institution under the Income Tax Act and is acceptable to Knowledge First Foundation. In addition to universities and colleges, recognized institutions include technical institutes, religious colleges and private post-secondary institutions registered under the “Private Vocational Schools Act.”
 
How do we know how much is available for withdrawal from my RESP?
View your most recent Statement of Account from Knowledge First Financial.
 
Are there limits in how much can be withdrawn as an EAP?
Here are the EAP limits set by the Canada Revenue Agency (CRA):
  • $5,000 for the first 13 weeks of study in a full-time program
  • Or $2,500 for each 13 weeks of study in a part-time program
  • Or $24,432 a year
 
How do I request a post-secondary withdrawal?
Visit the Withdraw from Your RESP  page for complete details on how to withdraw funds from your plan.

What is the Office of the Registrar?
The Office of the Registrar is located on the campuses of post-secondary institutions. Through this office, students can register for their courses. The Registrar is also responsible for the record-keeping of all their files and course information.

What is a Verification of Enrolment, and why is it required?
According to the Income Tax Act, proof of enrolment in a qualifying program is required to keep the government grants in your plan. RESP providers must request a Verification of Enrolment for every post-secondary withdrawal request. This form can be easily downloaded from the school website or obtained from the Registrar’s Office.

What is my child decides not to pursue post-secondary education?
It’s important to know that an RESP can remain open for 35 years. That’s good news if your student has decided to postpone of prolong their post-secondary education and they are in an individual plan.
If post-secondary studies are not in your child’s plans, you can transfer the plan to another student or consider one of the other ways to withdraw funds from your plan. We are here to help you understand the different options.
 
Using RESPs

 
Insurance

Government Grants

Only an RESP is eligible for government incentives like the CESG, CLB, BCTESG and QESI - find out more information and if you qualify.

Forms and Resources

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