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Canada Learning Bond (CLB) The Canada Learning Bond (CLB) is additional money offered by the federal government for families that receive the National Child Benefit Supplement (NCBS). The maximum amount that a beneficiary may receive in their RESP account from CLB payments is $2,000, calculated as $500 payable immediately plus $100 each year until the child is 15 years old. To help cover the cost of opening an RESP, the CLB program will pay an extra $25 with the first $500 CLB payment. In order to receive CLB payments, the beneficiary must be born after December 31, 2003. CLB payments are in addition to the amount that is available from the CESG program. Example At an adjusted family net income of $25,000, George and Maria are eligible for the National Child Benefit Supplement (NCBS). As a result, they will receive an additional $525 from the Canada Learning Bond (CLB) program; $500 payable immediately plus an additional $25 to set up the RESP. In total, the couple is eligible to receive additional money from all three federal programs - the CESG, the A-CESG, and the CLB. During the year in which they open the RESP account for their daughter Alyssa, they are eligible to receive $825, calculated as: • $200 from the CESG, calculated as $1,000 x 20%, • $100 from the A-CESG, calculated as $500 x 20%, and • $525 from the CLB. In addition, they will continue to generate a $200 CESG for Alyssa on their annual RESP contribution of $1000. Also, depending on their adjusted family net income, they may be able to generate an additional $200 of A-CESG and CLB towards Alyssa’s education savings. RESP Withdrawals Once a beneficiary is accepted into a qualified post-secondary educational institution, they become eligible to make withdrawals from their RESP. These withdrawals are called Educational Assistance Payments (EAPs). The taxable payments may consist of the CESG, A-CESG, CLB, and any investment earnings on all contributions. In addition, the contributions made by the subscriber, which are not taxable, may be paid to the beneficiary or returned to the subscriber at any time. Withdrawals from an RESP may be used for a number of expenses related to the beneficiary’s post-secondary education, such as tuition, books, accommodation, transportation, and computers. If the beneficiary does not immediately attend a qualified post-secondary education program, the money in the plan, with the exception of the CLB, can be transferred to a brother or sister’s RESP. The CLB is non-transferable and would have to be returned to the federal government. If transferring the plan is not an option, the contributions may be refunded to the contributor and the CESG money must be returned to the government. Any investment earnings from the RESP is paid to the subscriber as an Accumulated Income Payment (AIP) and becomes taxable income for the subscriber. It’s important to note that RESPs can remain open for up to 36 years. So, you may want to wait to close the plan just in case the beneficiary decides to go to school later on.