RESP’s and EAP’s
What are they:
RESP - Registered education savings plan
A registered education savings plan (RESP) is a contract between an individual (the subscriber) and a person or organization (the promoter). This is typically a bank or credit union.
Under the contract, the subscriber names one or more beneficiaries (the future student(s)) and agrees to make contributions for them, and the promoter agrees to pay educational assistance payments (EAPs) to the beneficiaries.
Family plans are the only RESP that allow subscribers to name more than one beneficiary. Each beneficiary must be connected by blood relationship or adoption to each living subscriber or have been so tied to a deceased original subscriber.
EAP - Educational assistance payments
An EAP is defined in the Income Tax Act as an amount, other than a refund of payments, that is paid out of an RESP to or for beneficiaries to help them further their education at the post‑secondary level.
An EAP may be paid to a beneficiary who is enrolled as a student in a qualifying educational program at a post-secondary educational institution, or who is at least 16 years old and enrolled as a student in a specified educational program at a post-secondary educational institution.
Effective March 28, 2023, the EAP limits increased from $5,000 to $8,000 for full-time studies and from $2,500 to $4,000 for part-time studies. RESP promoters may need to amend the terms of their existing plans in order for the new limits to apply as previously paid EAPs cannot be retroactively modified.
Please find more information below on how to create and RESP, make contributions, and what kind of expenses RESP’s may be used for.