Subscriber:

Person who opens the RESP account with a promoter.

Promoter:

Financial organization responsible for the administration of all amounts contributed to and withdrawn from the RESP.

Beneficiary(ies):

Child or children who will receive the benefits of the RESP to pay for post-secondary education.

Contributions:

Up to a lifetime maximum of $50,000 per beneficiary.

Canada Education Savings Grant (CESG):

Up to a lifetime maximum of $7,200 per beneficiary.

Canada Learning Bond (CLB):

Up to a lifetime maximum of $2,000 per beneficiary (eligibility subject to family income threshold).

Education Assistance Payment (EAP):

Portion of RESP comprising of government benefits (CESG and CLB), investment earnings and growth accumulated over the duration of the plan.

Post-Secondary Education Payment (PSE):

Portion of RESP comprising of principal contributions over the duration of the plan.

Step 1

Post-Secondary Program Cost

Before contemplating any withdrawals, estimate the total cost of your child’s post-secondary education program.

Step 2

RESP Breakdown

It is important to understand the composition of your RESP. Inquire about the breakdown between principal contributions, government benefits, and accumulated earnings. With that information in hand, you will be able to determine the optimal combination for each withdrawal.

Step 3

Withdrawal Limitations

Students enrolled in full-time post-secondary studies can access a maximum of $8,000 in EAP withdrawals during the first 13 consecutive weeks of enrollment, after which the limitation no longer applies.

Students enrolled in part-time post-secondary studies can access a maximum of $4,000 in EAP withdrawals for every 13-week period of enrollment.

There are no restrictions on PSE withdrawals.

Step 4

Designation of RESP Withdrawals

The promoter will need to designate the withdrawals you are requesting from the RESP account as either Education Assistance Payment (EAP) withdrawals or Post-Secondary Education Payment (PSE) withdrawals. It is important to understand the difference. EAP withdrawals include government benefits and accumulated earnings that are taxable to the student, while PSE withdrawals are tax-free, as they represent a refund of principal contributions.

For 2025, the federal basic personal amount is $16,129. This is the amount of income an individual can earn without paying any federal income tax. Keep this amount in mind and at the center of every withdrawal request from the RESP account.

Step 5

Withdrawal Strategies

It is beneficial to maximize the use of government benefits and accumulated earnings first, while students have no income or limited part-time income. Use the federal basic personal amount and eligible tuition fees to your advantage; don’t leave anything on the table! Withdraw all government benefits (CESG/CLB) before your child completes their post-secondary studies. Any remaining government benefits may need to be repaid to the government.

Step 6

Exit Plan

The RESP can remain open until the end of the 35th year after the plan was first opened, giving your child plenty of time to reconsider their educational path and plans. The ideal outcome before termination and closure of the RESP account is a final PSE withdrawal in your child’s final semester before graduation.

Remember, any unused government benefits remaining in the plan must be returned to the government. Any remaining accumulated earnings up to $50,000 may be transferred to your registered retirement savings plan (RRSP), provided you have sufficient contribution room. If you do not have the RRSP contribution room, the accumulated earnings must be withdrawn as an Accumulated Income Payment (AIP), which is taxed at your marginal tax rate plus an additional 20% penalty.