PAYMENTS FROM AN RESP

RESP withdrawals can be requested for educational and non-educational purposes.

RESP Educational Redemptions

An RESP can be made up of three different types of monies:

Based on the types of monies in the plan, an RESP offers 2 different educational payment options:

Educational Assistance Payments (EAPs) – Grant and Earnings
Post Secondary Education (PSE) – Contributions

Click here to refer to the Educational Withdrawal Comparison Chart.

1. EDUCATIONAL ASSISTANCE PAYMENTS (EAP)

Definition: An Educational Assistance Payment withdrawal is the payment of RESP earnings and CESG amounts to a beneficiary to help finance the cost of post-secondary education in Canada or outside Canada. Please note in order to be able to redeem the CESG, the beneficiary must be a Canadian resident. Non-resident beneficiaries will only be able to withdraw the earnings, subject to a non-resident withholding tax. For the purpose of an EAP, a qualifying educational program is defined below.

Qualifying for an EAP:

Full-time studies: a program must be at the post-secondary level and must last at least three consecutive weeks and requires at least 10 hours of instruction each week.
Part-time studies: a student must be at least 16 years old and the program must be at the post-secondary level and last at least three consecutive weeks and requires at least 12 hours of instruction each month.

Note: The program must be recognized as a qualifying program by the HRSDC.

EAP limits:

Program type	Time of redemption	Limit
Full- time studies	1^st 13 weeks	$ 5,000
	After 13 weeks	$ 20,000*
Part-time studies	Each 13 week period	$ 2,500

* If more than $20,000 EAP is requested, additional documents may be required to justify the EAP amount.

Forms Required:

Educational Assistance Payment (EAP) form (not mandatory, but recommended as all information on the form is required)
Proof of Enrollment: Enrollment can be for a current, upcoming or a term that has ended within 6 months. Please refer to the Proof of Enrollment guidelines.
Embossed Void Cheque: Only required if payment will be deposited to a bank account in the subscriber(s) or beneficiary’s name.

Tax Implications:

Regardless who the payee is, a T4A/Relevé 1 tax receipt for the total EAP (incentives and earnings) paid will be issued to the beneficiary. There are no tax implications for the subscriber(s).

2. POST SECONDARY EDUCATION (PSE)

Definition: A Post Secondary Educational withdrawal is the payment of RESP contributions to a beneficiary to help finance the cost of post-secondary education in Canada or outside Canada. For the purpose of a PSE, a qualifying educational program is defined below:

Qualifying for a PSE:

Full-time studies: a program must last at least three consecutive weeks and requires at least 10 hours of instruction each week.
Part-time studies: a student must be at least 16 years old and the program must last at least three consecutive weeks and requires at least 12 hours of instruction each month.

Note: The program must be recognized as a qualifying program by the HRSDC.

PSE limits:
There is no limit on the dollar amount for a PSE withdrawal.

Forms Required:

Educational Assistance Payment (EAP) form (not mandatory but recommended as all information on the form is required)
Proof of Enrollment: Enrollment can be for a current, upcoming or a term that has ended within 6 months. Please refer to the Proof of Enrollment guidelines.
Embossed Void Cheque: Only required if payment will be deposited to a bank account in the subscriber(s) or beneficiary’s name.

Educational Withdrawal Comparison

Conditions	Type of Withdrawal
Conditions	Education Assistance Payment (EAP)	Post Secondary Education (PSE)
Components (made up of)	CESG + Earnings from CESG & Contributions	Contributions (Principal)
Limits	Full Time Studies: 1st time student attending post secondary studies is $5,000 during the 1st 13 week period Part Time Studies: $2,500 for each 13 week period of study	No Limits
Documents Required	Educational Assistance Payment (EAP) Form Valid Proof of Enrollment	Educational Assistance Payment (EAP) Form Valid Proof of Enrollment
Tax Implications	A T4A tax receipt or Relevé 1 will be issued to the beneficiary for the total EAP paid out during a calendar year. No tax implications to the subscriber(s)	No tax receipt is issued to the subscriber(s) or the beneficiary

Payments for Non-Educational Purposes

Capital withdrawals (Non-educational)

Definition: A capital withdrawal is the payment of RESP contributions to the subscriber for non-educational purposes. The withdrawal will result in re-payment of the CESG to HRSDC.

Capital withdrawal limits: There is no limit on the dollar amount and frequency of the withdrawals.

Forms Required:

A letter of direction signed by the subscriber(s) indicating the withdrawal is for non-educational purposes is sufficient for a capital withdrawal.

Tax Implications:

There are no tax implications for this type of withdrawal. No tax receipts will be issued.

Earnings (growth) withdrawals (Non-educational)

Please refer to the Terminating an RESP section for more information.

Mutual funds sponsored by Mackenzie Financial Corporation are only qualified for sale in the provinces and territories of Canada. Please read a fund’s prospectus and speak to an advisor before investing.