Marie-Christine Daignault | Desjardins Group
Putting money aside for your children's post-secondary studies isn't always easy! The Canada Learning Bond (CLB) can help low-income families get a head start by allowing children of parents who open a registered education savings plan (RESP) to receive up to $2,000.
Angela Iermieri1 explains this federal government program.
Q. 1 Who is eligible?
- Whose net family income is lower then the threshold determined by the Government;
- With children born after December 31, 2003
- Who receive the Canada child benefit
If your child isn't eligible for the bond when you open an RESP, you can apply again later if your situation changes.
Q.2 How does it work?
- $500 when your child is born and $25 to help cover the cost of opening an RESP
- $100 each year until your child turns 15, as long as your family continues to receive the Canada child benefit
Parents aren't required to contribute to the RESP to be eligible for the Canada Learning Bond. If you're eligible, simply open an account and the government will deposit your payments.
The CLB is also retroactive, which means that eligible families can receive payments from previous years without having to make a contribution.
The CLB can only be used for post-secondary studies. If your child doesn't pursue a post-secondary education, the Canada Learning Bond must be returned to the Government of Canada.
Q.3 What is an RESP?
An RESP is a plan that allows you to:
- Put money aside for a child's post-secondary studies
- Grow funds tax-free
- Receive government grants:
Canada Education Savings Grant (CESG)
Quebec education savings incentive (QESI) (for Quebec residents only)
Canada Learning Bond (CLB)
You might also like: What do you to know about RESPs
The Education Savings Calculator can show you how much can save for your children's education based on the amount invested and grants you're eligible for depending on your family income.
The CLB in numbers
- In 2014, 31.6% of all eligible children in Canada received the CLB, a significant increase given the 29.8% participation rate in 2013. However, the majority still aren't taking advantage of the program.
- Nearly 80% of children who received the CLB also benefitted from parental contributions to their RESP. This number is noteworthy given that parents are deciding to invest additional funds even though the program doesn't require a contribution.
 Financial Planner and Mutual Funds Representative for Desjardins Financial Services Firm Inc.