An RESP question I frequently get at this time of year is along the lines of:
“I maxed out my child’s RESP grant last year in [insert month here] – do I have to wait 12 months from that time to get more grants?”.
In other words – they want to know when a new “year” of grant-eligible contributions are available.
The answer is always going to be January 1st of each year.
It doesn’t matter when you contributed last year or when the kid’s birthday is. When the new year rolls around, another $2,500 of grant-eligible contribution room becomes available for qualified beneficiaries. The grant-eligible contribution room is always determined by the calendar year.
This rule also applies to situations where there are partial years of eligibility ie a child is born in July or moves to Canada in June – in either case, they get the full $2,500 of grant-eligible contribution room for that year and then on January 1st of the following year, they get another $2,500.
Don’t forget the eligibility rules for RESP grants
The last year a child can get any RESP grants is the calendar year in which they turn 17. See RESP contribution rules.
There are specific eligibility rules for kids in the years when they turn 16 and 17. Make sure you understand these rules if you started the RESP late or haven’t contributed much.
The maximum amount of lifetime RESP grants a child can get is $7,200. This number includes any additional grants (but doesn’t include Canada Learning Bond). If someone contributes $2,500 a year for a child born in 2013 and gets 20% grants, they will max out the child’s grant with a $1,000 contribution in the year they turn 14. This scenario hasn’t been a problem in the past because the eligibility amount was only $2,000 of grant-eligible contribution room per year in 2006 and prior, plus the current RESP grant system only started in 1998.
Want to learn more about RESPs? Buy The Book:
The RESP Book: The Simple Guide to Registered Education Savings Plans
Everything you need to know about RESPs.