Canada Education Savings Act

Marginal note:CES grants

• 5 (1) Subject to this Act and the regulations, on application to the Minister in a form and manner approved by the Minister, the Minister may, in respect of any contribution made in 1998 or a subsequent year to a registered education savings plan by or on behalf of a subscriber under the plan in respect of a beneficiary under the plan who is less than 17 years of age at the end of the year preceding the contribution, pay to a trustee of a trust governed by the plan a CES grant for the benefit of the trust. The payment is to be made on any terms and conditions that the Minister may specify by agreement between the Minister and the trustee.

• Marginal note:Amount of grant

  (2) The amount of a CES grant that may be paid for a particular year at any time is equal to the lesser of

  • (a) 20% of the contribution, and

  • (b) the amount, if any, by which the lesser of

    • (i) $1,000, unless the particular year is any of 1998 to 2006, in which case, $800, and

    • (ii) the beneficiary’s unused CES grant room for the particular year at that time

    exceeds

    • (iii) the total of all CES grants paid before that time — other than those amounts paid under subsection (4) — in respect of contributions made in the particular year in respect of the beneficiary.

• Marginal note:Unused CES grant room

  (3) The unused CES grant room for a beneficiary for a particular year at any time is

  • (a) if the beneficiary was 17 years of age or older at the end of the preceding year, nil; or

  • (b) in any other case, determined by the formula

    $400A + $500B - C

    where

    A

    is the number of years after 1997 and before 2007 in which the beneficiary was alive, other than a year throughout which the beneficiary was

    • (i) an ineligible beneficiary in accord-ance with the regulations, or

    • (ii) not resident in Canada,

    B

    is the number of years after 2006 in which the beneficiary was alive, up to and including the particular year, other than a year throughout which the beneficiary was

    • (i) an ineligible beneficiary in accord-ance with the regulations, or

    • (ii) not resident in Canada, and

    C

    is the total of all CES grants paid before that time — other than those amounts paid under subsection (4) — in respect of contributions made in a preceding year in respect of the beneficiary.

• Marginal note:Additional amount of grant

  (4) The amount of a CES grant that may be paid for a particular year at any time is increased by the lesser of

  • (a) the amount that is

    • (i) 20% of the contribution, if the beneficiary

      • (A) is a qualified dependant of an eligible individual whose adjusted income used to determine the amount of a child tax benefit in respect of January in the particular year is the first threshold for the particular year or less, or

      • (B) is a person in respect of whom a special allowance under the Children’s Special Allowances Act is payable for at least one month in the particular year, and

    • (ii) 10% of the contribution, if the beneficiary is a qualified dependant of an eligible individual whose adjusted income used to determine the amount of a child tax benefit in respect of January in the particular year is more than the first threshold for the particular year but not more than the second threshold for the particular year, and

  • (b) the amount by which

    • (i) $100, in the case of a beneficiary referred to in subparagraph (a)(i), or

    • (ii) $50, in the case of a beneficiary referred to in subparagraph (a)(ii)

    exceeds

    • (iii) the total of all amounts paid under this subsection before that time in respect of contributions made in the particular year in respect of the beneficiary.

• Marginal note:No determination for January

  (5) If there has been no determination of eligibility for a child tax benefit in respect of January in a particular year, the adjusted income to be used for the purposes of subsection (4) is the adjusted income used to determine the amount of a child tax benefit for the first month in the particular year in respect of which eligibility has been established.

• Marginal note:Beneficiary born in December

  (6) In applying subsection (5) in respect of a beneficiary born in December, the reference to “the first month in the particular year in respect of which eligibility has been established” in that subsection is to be read as a reference to “January of the next year”.

• Marginal note:Change in care

  (6.1) If, in a month following January in a particular year, an individual who was not the primary caregiver of a beneficiary in January of that year becomes the beneficiary’s primary caregiver, then the adjusted income to be used for the purposes of subsection (4) in respect of contributions made to the trustee of the trust designated by that individual is the adjusted income used to determine the amount of a child tax benefit for the first month in the particular year in respect of which the individual’s eligibility for the child tax benefit has been established.

• Marginal note:Change in care in December

  (6.2) In applying subsection (6.1) in respect of a beneficiary for whom the individual becomes the beneficiary’s primary caregiver in December, the reference to “the first month in the particular year in respect of which the individual’s eligibility for the child tax benefit has been established” in that subsection is to be read as a reference to “January of the next year”.

• Marginal note:Designation

  (7) The amount referred to in subsection (4) is to be paid to the trustee of a trust designated, in the form and manner approved by the Minister, by the primary caregiver of the beneficiary at the time the contribution is made.

• Marginal note:More than one primary caregiver

  (7.1) If there is more than one primary caregiver of the beneficiary at the time a contribution is made, the amount referred to in subsection (4) is to be paid to the trustee of the trust designated under subsection (7) to which a contribution is first made.

• Marginal note:Additional grant less than maximum amount

  (7.2) For greater certainty, if there is more than one primary caregiver of the beneficiary and the total of all amounts paid under subsection (4) to the trustee of the trust to which a contribution is first made is less than the maximum amount that may be paid under that subsection, then amounts may be paid under that subsection to the trustee of a trust designated by any primary caregiver of the beneficiary.

• (8) [Repealed, 2010, c. 12, s. 31]

• Marginal note:Restriction

  (9) Subsection (4) applies only to contributions made in 2005 or a subsequent year.

• Marginal note:Lifetime cap

  (10) Not more than $7,200 in CES grants may be paid in respect of a beneficiary during their lifetime.