Canada Learning Bond: No RESP contributions required
Author: Sound Choices
September 25, 2020
Education Savings: What you need to know about the Canada Learning Bond (CLB)
The content in the article below is meant for Canadian investors only.
The CLB is a grant that the federal government deposits directly into an RESP every year if the child is eligible, even if the parents don’t add any money.
How much is the CLB?
The first year: $500 (plus $25 to help cover the costs of opening the RESP)
The following years: $100 for each year that the child is eligible – until the calendar year in which they turn 15
Lifetime maximum: $2,000 per beneficiary
Who is eligible for the CLB?
Any child born on or after January 1, 2004 if they are Canadian residents and have a valid Social Insurance Number.
In 2018, 3.3 million children were eligible for the Canada Learning Bond, but only about 38% or 1.3 million actually received it.*
Is there a maximum income level?
Beginning July 1, 2017**, eligibility for the Canada Learning Bond is based, in part, on the number of qualified children and the adjusted income of the primary caregiver.†
Eligibility thresholds†† (July 1, 2020 to June 30, 2021)
Number of qualified children
Adjusted income
1 to 3
Up to $48,535
4
Less than $54,764
5
Less than $61,016
6
Less than $67,268
Note: Beneficiaries from larger families with higher adjusted income may also be eligible for the CLB.
How do I apply for the CLB?
Ensure your tax returns are up to date
Open an RESP with the child named as a beneficiary – make sure the RESP provider can handle the CLB as not all do
Apply for the CLB – it must be the primary caregiver or their partner who applies
Once the application is approved, the appropriate amount will be deposited directly into that RESP every year that the child is eligible to receive it.
For more information on RESPs, visit AGF.com/RESP or contact your financial advisor.
* Source: 2018 Annual Statistical Review, Canada Education Savings Program, Employment and Social Development Canada.
** Source: https://www.canada.ca/en/employment-social-development/services/learning-bond/eligibility.html. From July 1, 2016, to June 30, 2017, a child was eligible for the CLB if the primary caregiver would have otherwise received the National Child Benefit Supplement for the child, had it continued to be paid for that period. For years prior to July 1, 2016, a child was eligible for the CLB if the primary caregiver received the National Child Benefit Supplement for the child.
† Adjusted income includes the income of the primary caregiver’s cohabiting spouse or common-law partner.
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