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RESP Withdrawals

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  • RESP Withdrawals

    So, I'm filling out the forms to have some money withdrawn from the education plan to pay for child's tuition in September. Due to circumstances from last year, I'm agreeing to pay the entire September costs. I'm withdrawing enough to cover tuition, books, rent for 4 months in a house that we are buying, and a new laptop.

    For the EAP portion, does that have to go to her directly? There is no way she will use the money to pay for tuition. I'm 98% positive she will drop out mid-way through the semester, but I'm giving her the benefit of the doubt. I am putting it on my credit card and will use the RESP to pay it back once it comes through. I have no idea how this stuff works, and I want to make sure it goes to me.

  • #2
    If you withdraw from the Eap you need a record of enrollment. Take out as much as possible as you have to pay back the grant when kid is done school. Kid will receive a tax receipt for the amount.

    You dont have to give it to kid. You can pay up front and cover it with RESP withdrawal. It goes in your account directly.
    Last edited by rockscan; 09-01-2020, 08:09 PM. Reason: Added item


    • #3
      If your bank does it correctly (and they don't always), the PSE portion (capital contributions) are made directly to you, and the EAP (grants and accumulated earning) go directly to the student and are taxable to them. It may be possible to have the financial institution pay the funds directly to the educational institution.


      • #4
        I do have the record of enrolment which I am sending with the forms.

        When you say grant, do you mean the CESG? When I contributed the funds, the government matched them 20%. I didn't know I had to pay that back?

        There's a limit of $5000 for the first 13 weeks of school that I can withdraw from EAP, so I've set it at $2,500. Child is literally earning zero income right now, so there's little chance that will affect them when it comes to taxes. Their total income including that MAY be $5-6k as she was working part-time a few weeks ago for about 2 months.

        I am trying to stagger the RESP so that I can cover 5 years of tuition/expenses. If her mother decides to contribute after this semester, I can drag it out for about 2 additional years. I'm hoping she just goes and gets it done.


        • #5
          The government portion is the EAP. Figure out how much your contribution yearly will be for each year and make sure you max out (or withdraw all) the EAP as that gets paid back to the government when kid is done school. For instance, lets say you had $7000 in govt contributions and your total contribution for all years was $9000 but you used $5000 principle instead of grants. That means only $4000 of the grant was spent and you have to pay back $3000.

          Your financial advisor will help. As long as your kids annual income is less than $11,000 per year, the $5000 max withdrawal will not impact them. We learned the hard way as my husband was hesitant to take EAP portions and this year he had to pay back $1500. I know it sounds shady but if the govt will give you money for your kids education, use every penny you can and keep your investment!


          • #6
            Consult with your RESP provider for the facts.

            Here's a good summary from one of them (RBC in this case), but it will be the same for other RESP providers when it comes to the EAP portion.



            • #7
              Originally posted by dad2bandm View Post
              Consult with your RESP provider for the facts.

              Here's a good summary from one of them (RBC in this case), but it will be the same for other RESP providers when it comes to the EAP portion.


              Your financial advisor is not a lawyer. You will need proof of enrollment to withdraw the eap portion and can withdraw up to $500 per year of that portion of the investment. Your child will receive a tax receipt for that. How that amount is applied to your share of the expense is family law though.

              We went through this last school year and the judge specifically said what my husband does with his RESP is his business. He saved for his share and what he saved is his to use. He did not have to hand over the entire RESP for all costs, just his portion.

              Sent from my iPhone using Tapatalk


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