The new Canada Child Benefit can help make it easier for families to save for their children's future education.
The Canada Child Benefit (CCB) is a tax-free monthly payment made to eligible families to help them with the cost of raising children under 18 years of age.The CCB helps boost the bottom line for eligible families as they cope with the rising cost of living and child care expenses. It can also help make saving for your child’s future easier by putting your CCB into a Registered Education Savings Plan (RESP).
According to the federal government, families may receive a monthly CCB worth up to $533 per child.
How much will you receive for this child benefit? The actual amount will vary for families depending on their adjusted family net income and number of children. You can find out what your family will be receiving using the Child and family benefits calculator.
If you use your CCB to contribute to an RESP, it will get a boost thanks to government grants. For example, your CCB could grow by as much as 20%! This is because of the Canada Education Savings Grant (CESG) which matches 20% of your contributions to a maximum of $500 per year and $7,200 lifetime per child. Your contributions would not only be enhanced by grant money but also earn tax-sheltered income while in the RESP, all of which can be used to help your child graduate debt-free!
It’s no secret that post-secondary education isn’t cheap and its cost is on the rise. In September 2016, Statistics Canada reported that “Canadian full-time students in undergraduate programs paid, on average, $6,373 in tuition fees for the 2016/2017 academic year, 2.8% higher than the 2015/2016 average ($6,201).” That is close to a three per cent increase from 2015/2016. And these numbers don’t include costs such as books, food or housing!
These days, getting an education means getting ahead. Saving with an RESP can help prepare you financially in the pursuit of higher learning, which in turn can give you an edge in the workforce. According to a report by Human Resources and Skills Development Canada, 3 out of 4 new jobs require a post-secondary education. Keep in mind, university and college aren’t the only paths to success: there are many other post-secondary programs available to students to help get them ready for the future.
Kids grow up fast: One minute they’re learning how to walk, the next, they’re choosing what they want to study and trying to decide which post-secondary school suits them. You can easily avoid the stress of having to suddenly find the money needed to cover tuition or books. It’s all about starting to save early and taking advantage of the government grants that come with an RESP.
The Canada Child Benefit can help families plan for the day their child graduates and goes onto post-secondary education. It may be hard to picture now, but the time goes by quickly! The CCB provides a great opportunity to kick-start saving or to enhance your RESP so you and your child are ready when the future arrives.Original article posted August 2016. Updated May 2017.