Vancity Credit Union

Vancity Credit Union

August 14, 2015 08:00 ET

B.C. Families Leave Billions in RESP Grants on the Table

New $1,200 Provincial Education Grant Launches August 15

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 14, 2015) - British Columbia families could miss out on $4.7 billion in education grants in their children's lifetime, an average of $5,600 per eligible child, if current participation and contribution rates continue, warns Vancity credit union.

Last year alone B.C. parents failed to claim almost $385 million in RESP grants due to low participation rates in the two main grant programs: the Canada Education Savings Grant had 53 per cent participation and the Canada Learning Bond had 37 per cent.

Starting Saturday, August 15, 2015, parents will also be able to apply for the new British Columbia Training and Education Savings Grant. Announced in 2013, the grant is a one-time provincial incentive of $1,200 available to children born on or after January 1, 2007.

Including the new provincial incentive, B.C. families now have the opportunity to access a total of $8,400 in RESP grants per child and low-income families can access $10,400 per child.

While the Canada Education Savings Grant, which adds 20 per cent to the first $2,500 of annual RESP contributions each year (up to $500 a year), requires parents to make contributions, the Canada Learning Bond and new British Columbia Training and Education Savings Grant do not.

The Canada Learning Bond offers a $500 RESP contribution to children from low-income families, plus an additional $100 every year until age 15, up to a maximum of $2,000. With a 2014 participation rate of 37 per cent, that means 165,663 eligible children in B.C. are not currently benefitting from the program.

A breakdown of participation in the Canada Learning Bond by city as of March 31, 2015 reveals that parents in some areas of Metro Vancouver and Greater Victoria are taking advantage of that particular incentive more than others:

Richmond: 52%
Burnaby: 49%
Vancouver: 49%
New Westminster: 48%
West Vancouver: 47%
Surrey: 46%
Coquitlam: 45%
North Vancouver: 44%
Port Coquitlam: 44%
Port Moody: 43%
Squamish: 43%
Delta: 43%
Abbotsford: 41%
White Rock: 40%
Langley: 38%
Maple Ridge: 35%
Pitt Meadows: 34%
Greater Victoria: 29%
Mission: 29%
Chilliwack: 27%

In 2014, 379,120 students in Canada withdrew $3.04 billion from their RESPs to help pay for school, representing about 19 per cent of all post-secondary students.

Parents can apply for the grants through participating financial institutions, including Vancity.

Quote

"Families are missing out on these education grants because they either don't know about them or have other budgeting priorities. They need to know that some of the grants don't require any contributions and are essentially free money, plus they can benefit from other grants even with a small contribution."

-- Sophie Salcito, investment advisor at Vancity

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About Vancity

Vancity is a values-based financial co-operative serving the needs of its more than 509,000 member-owners and their communities through 59 branches in Metro Vancouver, the Fraser Valley, Victoria, Squamish and Alert Bay. As Canada's largest community credit union, Vancity uses its $18.6 billion in assets to help improve the financial well-being of its members while at the same time helping to develop healthy communities that are socially, economically and environmentally sustainable.

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