Your RESP’s total value includes your original contributions (deposits), any Canada Education Savings Grant (CESG) or BC Training and Education Savings Plan (BCTESP) money you've received, as well as accumulated investment earnings.
You access funds from this savings plan in two ways: through Educational Assistance Payments (EAPs) and Post-Secondary Education withdrawals (PSEs).
Before you request a withdrawal
Before you request a withdrawal, you must confirm that your child is attending a qualifying post-secondary institution and is registered in a qualifying program of study.
You will need documentation to confirm both the institution and the program. Proof of enrollment documentation is considered valid for a period of up to six months from the date stated on the document.
While a written letter of acceptance or offer of admission, screenshots of course lists, tuition fee breakdown or tuition amount that is paid, invoices or receipts, student cards or emails aren’t considered proof on their own, they may be admissible with other acceptable proof of enrollment documents.
An RESP Verification of Enrolment form can be obtained from a BlueShore advisor.
Determine how much you wish to withdraw
You may wish to withdraw enough to cover the full year or semester by semester. Keep in mind that you can use your RESP to pay for any “qualifying expense”; this includes any expense that helps your student further his or her post-secondary education. It generally includes tuition, books, supplies, living and transportation costs.
Decide what type of withdrawal you wish to make
There are two types of withdrawals you can make from an RESP:
Post-Secondary Education Payment (PSE) – your contributions over the years
Education Assistance Payment (EAP) – the amount accumulated through grants, as well as interest or dividend income.
There are timing issues, withdrawal limits, and tax considerations associated with each; your BlueShore financial advisor can provide invaluable guidance in this area.
Note, if this is the first EAP request for your child, the withdrawal is limited to $5,000 (and only $2,500 for specified educational programs) for the first 13 consecutive weeks of study. These limits may be increased by having your RESP administrator at BlueShore submit a written request.
Know who needs to sign the RESP Withdrawal form
This differs for EAP vs. PSE withdrawals. For EAP withdrawals, the subscribers (both parents, if the RESP is in both names) and the beneficiary (the child) sign. For PSE withdrawals, only the subscriber(s) must sign.
Time to receive funds
If your RESP funds are readily accessible (liquid), it will take 3 - 10 business days to receive the requested amount. You may, however, have an RESP portfolio that is a mix of investments as well as cash (savings accounts). You will need to manage the timing of any term deposit maturity dates carefully to ensure you have access to the RESP funds when you need them.
Note, that if proper documentation is not provided, the withdrawal request can be rejected, causing further delays.
Income tax implications
Taxes on EAP withdrawals are paid by the beneficiary (the student), not the contributor. The beneficiary must claim the withdrawals as income and will receive a T4A in the mail. Your child will likely be in a low tax bracket, however, and will pay little or no tax. If your child has income from work or a trust, talk to your financial advisor to help you time the withdrawals to reduce his or her taxable income.
For further clarification, please don’t hesitate to contact your BlueShore advisor.
Method of payment
There are a variety of payment methods available. A cheque may be mailed to the beneficiary’s mailing address, to the address listed on the account, or directly to the educational institution address that is provided on the RESP withdrawal form. If the cheque is mailed directly to the educational institution, you must ensure that the Student ID number is provided in the proof of enrolment.