For as little as $0.38 per day, a Quebec family can subscribe to an RESP
MONTREAL, June 11, 2012 /CNW Telbec/ - While Quebec families are wondering which savings vehicles on the market are the most interesting, specifically with regard to education savings, it is important to examine the workings and benefits of certain financial products available, particularly the RESP.
Contrary to popular opinion, it is false to believe that RESPs are only accessible to wealthier families. In reality, it costs as little as $0.38 per day to invest in an RESP to financially support children and help them achieve their dreams and become active members of tomorrow's society.
"For nearly 50 years, we have specialized in registered education savings plans and truly believe in this savings vehicle as a way to facilitate accessibility to a post-secondary education for all students," says Tina Fournier-Ouellet, Senior Manager of Communication and Public Relations, and spokesperson for Universitas Trust Funds. "What is particularly interesting is that not only can RESPs be used to finance tuition fees, but living expenses as well, whether it be for vocational, college or university studies," she concludes.
Government Incentives
It is important to remind that for every dollar invested, the federal and provincial governments will also contribute to the RESP. The Canadian government provides the Canada Education Savings Grant, which corresponds to a 20% increase on the amount contributed by the subscriber. The provincial government, for its part, offers the Quebec Education Savings Incentive, which increases savings by 10%. This savings vehicle is particularly interesting for middle-class families, given that the scholarships a student receives for his or her post-secondary studies are made up of grants, capital gains and interest accumulated over the contribution period. As for the principal (contributions), it is returned to the subscriber in full.
Additional Subsidies for Families with Low to Moderate Incomes
Both levels of government also offer additional assistance to increase subscription accessibility to RESPs for families with lower financial means. The three following programs were introduced for this purpose:
- The Enhanced Quebec Educations Savings Incentive (QESI +): A supplementary amount from the provincial government applicable to the first $500 annually contributed to an RESP, and based on the net family income of the beneficiary's primary caregiver.
| Net family income of the beneficiary's primary caregiver in 2012 (amounts indexed annually) |
On the first $500 | |
| % | $ | |
| $0 - $40,100 | 10% | $50 |
| ≥ $40,100 - $80,200 | 5% | $25 |
| ≥ $80,200 or more | - | - |
- The Enhanced Canada Education Savings Grant (CESG +): A supplementary amount from the federal government applicable to the first $500 annually contributed to an RESP, and based on the net family income of the beneficiary's primary caregiver.
| Net family income of the beneficiary's primary caregiver in 2012 (amounts indexed annually) |
On the first $500 | |
| % | $ | |
| $0 - $42,707 | 20% | $100 |
| ≥ $42,707 - $85,414 | 10% | $50 |
| ≥ $85,414 or more | - | - |
- The Canada Learning Bond (CLB): Any child born as of January 1, 2004 whose family receives the National Child Benefit Supplement (NCBS)1 is entitled to the CLB. The latter consists in an initial $500 payment2 to the RESP of an eligible beneficiary; the net family income for eligibility is usually lower than $42,707. Subsequently, the beneficiary may be entitled to receive up to fifteen CLB payments of $100 (until the age of 15) or a payment for each year the beneficiary's family remains eligible. When the latter reaches the age of 16, the CLB could total up to $2,000 in education savings.
Invest Early, Earn More!
Universitas Trust Funds reminds you that there is no age limit to start saving in an RESP and that you can do so at any time. However, the sooner you invest in an RESP, the higher the scholarships for your child's education will be. "We suggest opening an RESP as soon as your child is born if you wish to maximize the government incentives and accumulated interest. If ever your child does not pursue a post-secondary education, various options are available. For example, you may choose to transfer the sums in the RESP to a registered retirement savings plan (RRSP)3, or transfer the RESP to another child who wishes to pursue his studies3," suggests Ms. Fournier-Ouellet.
About Universitas Trust Funds
Established since 1964, Universitas Trust Funds is an RESP industry leader at the service of families across the provinces of Quebec and New Brunswick. As a not-for-profit organization, we focus all our efforts on offering the highest possible scholarships. With the mission to favour the pursuit of post-secondary education through savings and scholarships or educational assistance payments, Universitas Trust Funds manages close to $800 million in assets and has paid out nearly $400 million in scholarships to hundreds of thousands of deserving students. To learn more about our products and services, visit universitas.ca.
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1 Please take note that the NCBS is a component of the Canada Child Tax Benefit (CCTB), administered by the Canada Revenue Agency (ARC).
2Based on net family income, certain conditions apply.
3 Certain conditions apply (based on the saving plan selected).
For more information on Universitas Trust Funds and its products, please contact the following:
Lydia Juliano or Julie Deschambault, Matom Communication
[email protected] or [email protected]
514 949-1446 or 514 891-8645
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