GATINEAU, QC, June 29, 2015 /CNW/ - The Honourable Pierre Poilievre, Minister of Employment and Social Development, today marked the end of the school year by highlighting the Harper Government's continued commitment to enhancing access to post-secondary education by removing financial barriers for families.
Minister Poilievre outlined the details of federal education savings incentives available to families under the Canada Education Savings Program, including the Canada Education Savings Grant (CESG) and the Canada Learning Bond.
The CESG is money offered by the Government of Canada to encourage families to start saving early for their children's post-secondary education. To further kick-start education savings for low-income families, the Harper Government provides the Canada Learning Bond to children who are eligible to receive the National Child Benefit Supplement when a Registered Education Savings Plan (RESP) is opened on their behalf. To receive the CESG, annual contributions must be made to an RESP, however no contributions are required to receive the Canada Learning Bond.
Minister Poilievre also reiterated the importance of measures that the Harper Government is introducing to help families prosper. These measures include enhancements to the Canada Student Loans Program, increases to the Universal Child Care Benefit (UCCB), the introduction of the Family Tax Cut and improvements to the Child Care Expenses Deduction and the Children's Fitness Tax Credit.
- Annual CESG payments by the Harper Government increased to $811 million in 2014 from $514 million in 2006.
- The total number of beneficiaries to receive a CESG increased to 5.1 million in 2014 from 2.9 million in 2006.
- In 2014, annual CLB payments increased to $106 million, with 431,000 children receiving the Canada Learning Bond, compared to payments of $16.6 million, with 26,700 children receiving the Canada Learning Bond in 2006.
- Over $4 billion was contributed to RESPs in 2014. Earnings on RESP savings can grow tax-free until the money is withdrawn to finance post-secondary education.
- In 2014, over 379,000 students withdrew a total of $3.04 billion from RESPs to help pay for their post-secondary education.
"The Harper Government recognizes that saving for post-secondary education is vital, not only for a young person's future, but also for Canada's long-term growth and prosperity. An RESP, supplemented with Canada Education Savings Grants and the Canada Learning Bond, helps families make post-secondary education a reality for their children. In addition, the Harper Government is doubling the Tax Free Savings Account to $10,000 annually and providing the Family Tax Cut and Benefits to put more money back into the pockets of moms and dads to care for their children.This is important information that every family should know."
– The Honourable Pierre Poilievre, Minister of Employment and Social Development
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The Government of Canada invests significantly in helping all Canadians save for, finance and repay their post‑secondary education. These measures include the Registered Education Savings Plan, the Canada Learning Bond, the Canada Education Savings Grant, Canada Student Loans and Grants and the Repayment Assistance Plan.
Canada Education Savings Program
The Canada Education Savings Program provides education savings incentives to encourage and reinforce the importance of early and sustained saving for a child's post-secondary education, specifically using Registered Education Savings Plans (RESPs).
An RESP is a special savings plan, like a savings account, that helps save money for a child's education after high school. RESPs allow your savings to grow tax-free. RESPs also make it possible to receive extra money through the Government of Canada's education savings incentives—the Canada Learning Bond and the Canada Education Savings Grant (CESG).
The CESG is money that the Government of Canada will add to a child's RESP to help their savings grow. A child could receive up to a lifetime maximum of $7,200.
There are two types of Grants:
- Basic Grant
The Government will add 20 cents on every dollar on the first $2,500 contributed each year to an RESP. A child can receive up to $500 a year and up to a lifetime maximum of $7,200.
- Additional Grant
Depending on the net family income, a child could also receive an extra 10 percent or 20 percent on every dollar of the first $500 contributed each year.
The Canada Learning Bond is $500 offered by the Government of Canada to help parents start saving for their child's education. Plus, a child could get an additional $100 every year until he or she turns 15 years old, to a maximum of $2,000. Parents, or primary caregivers, do not have to contribute any of their own money, but an RESP must be opened.
To receive the Bond, a child must have been born in 2004 or later. The primary caregiver must also receive (or have received) the National Child Benefit Supplement under the Canada Child Tax Benefit (sometimes known as the "family allowance" or "baby bonus").
Since the introduction of the Canada Learning Bond in 2005, the Government of Canada has paid out $605 million to over 716,000 beneficiaries.
For more information on federal savings incentives, visit CanLearn.ca.
Economic Action Plan 2015: Helping students and families pay for education
Canada Student Loans – reducing parental contributions
The Government of Canada is making the Canada Student Loans Program work for families by reducing the expected parental contribution under the needs assessment process.
Although parents are not obliged to contribute to their child's post-secondary education, parental income is one of the factors considered in a student needs assessment.
The amount of financial assistance provided to post-secondary students is determined through a needs assessment, which estimates gaps between the student's allowable expenses and their expected contribution to the cost of education. Reducing the expected parental contribution will help ensure that dependent students have adequate resources during their studies, particularly those whose parents do not have the financial flexibility to contribute to the cost of their education.
Reducing the expected parental contribution better recognizes the financial realities faced by Canadian families and will ensure that more students have adequate resources to pursue post-secondary education and acquire skills for employability.
Canada Student Loans – eliminating in-study student income from the CSLP needs assessment process
Economic Action Plan 2015 proposes to provide $116 million over four years, starting in 2016–17, to eliminate in‑study student income from the Canada Student Loans Program needs assessment process.
This change ensures that students can work and gain valuable labour market experience while attending school without having to worry about a reduction in their financial assistance.
Currently, $100 per week of a student's income is exempt from the needs assessment process, with any amount above the $100 limit reducing a student's Canada Student Loan assistance on a dollar-for-dollar basis. An estimated 87,000 students would benefit from this change.
Canada Student Grants – expanding eligibility for the Low- and Middle-Income Canada Student Grants to short duration programs
Economic Action Plan 2015 proposes to provide $184 million over four years, starting in 2016–17, to expand eligibility for Canada Student Grants to students in short-duration programs for the Low- and Middle-Income Canada Student Grants to help Canadians acquire or upgrade their skills for quick entry into the labour market.
The Canada Student Grant for Students from Low-Income Families currently provides non-repayable financial assistance ($250 per month of study) to full-time students from low-income families who are registered in programs with a minimum duration of 60 weeks. The Canada Student Grant for Students from Middle-Income Families provides non-repayable financial assistance ($100 per month of study) to full-time students from middle-income families who meet similar eligibility requirements.
This proposal will expand the eligibility for both Low- and Middle-income Canada Student Grants to include programs of shorter duration (duration between 34 and 59 weeks), at a reduced grant amount of $125 per month for the low-income grant and $50 per month for the middle-income grant.
Students in programs with a minimum duration of 60 weeks would still have access to the higher Low- and Middle-income Canada Student Grant of $250 per month of study and $100 per month of study, respectively. The expansion would help approximately 42,000 additional students per year, including approximately 22,000 students at private career colleges, to gain eligibility to Canada Student Grants.
Canada Student Grants provide funding that students do not have to pay back and help many students from low- and middle-income families, as well as students with permanent disabilities, afford their education.
On April 7, 2015, Prime Minister Harper announced the Government's intention to expand eligibility for Canada Student Grants for students from low- and middle-income families enrolled in short-duration educational programs.
Universal Child Care Benefit
The Government of Canada is introducing measures to help families prosper. These measures include enhancements to the Universal Child Care Benefit (UCCB), the introduction of the Family Tax Cut and improvements to the Child Care Expenses Deduction and the Children's Fitness Tax Credit.
- The UCCB would increase to up to $1,920 per year for children under the age of 6, and parents would receive a benefit of up to $720 per year for each child aged 6 through 17.
For more information on these new measures, visit Helping Families Prosper.
SOURCE Employment and Social Development Canada
For further information: Aaron Bell, Press Secretary, Office of the Minister of Employment and Social Development, 613-220-3230, email@example.com; Media Relations Office, Employment and Social Development Canada, 819-994-5559, firstname.lastname@example.org