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) $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

    $400 (A - B - C) - D

    where

    A

    is

    • (i) if the beneficiary was born before 1998, the amount, if any, by which

      • (A) the beneficiary’s age in whole years at the end of the particular year

      exceeds

      • (B) the beneficiary’s age in whole years at the end of 1997, and

    • (ii) in any other case, one plus the beneficiary’s age in whole years at the end of the particular year,

    B

    is the number of preceding years throughout which the beneficiary was an ineligible beneficiary in accordance with the regulations,

    C

    is the number of preceding years beginning after 1997,

    • (i) not included in the value of B in respect of the beneficiary for the particular year, and

    • (ii) throughout which the beneficiary was not resident in Canada, and

    D

    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 $35,000 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 $35,000 but not more than $70,000, 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: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:Indexing

  (8) The amounts $35,000 and $70,000 referred to in subsection (4) are to be adjusted for each year that is after 2004 in the manner set out in section 117.1 of the Income Tax Act.

• 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.