A postsecondary education, though expensive, is essential for children growing up today.
Allyson Schmidt, Credit Counselling Service of Sault Ste. Marie and District’s financial empowerment coach, wants local parents to know of the availability of a Registered Education Savings Plan (RESP) for each of their children.
Schmidt, along with federal government and bank officials, will be available at a special RESP session, to be held from 10 a.m. to 5 p.m. Friday, Nov. 30 in the James L. McIntyre Centennial Library’s basement at 50 East St.
“This event is to help people get the Canada Learning Bond they’re eligible for. People don’t know the Canada Learning Bond exists. The RESP is like a container, and people have to sign up for the container at the financial institution of their choice. That’s where they get it done, so they have to get their container for the government to put the Canada Learning Bond into. If they don’t have that container they can’t get the Canada Learning Bond,” Schmidt said to SooToday Friday.
Clearly, Schmidt said, many parents need to know about RESPs.
“67 per cent of eligible kids aren’t receiving it because people don’t know about it. Statistics show if your parents went to university, your parents are going to be more likely to sign you up, but if postsecondary school isn’t the norm in your family it’s not something that parents are going to necessarily know about.”
‘Postsecondary school’ includes university, college, trade school, private schools or study abroad programs.
Employment and Social Development Canada, a federal government agency, will have representatives on site at the library to issue paperwork for social insurance numbers and birth certificates, necessary for children to have in order for them to be signed up for an RESP.
“It is an investment product. After a person turns 18 and wants to go to school, they just bring proof of enrolment to the bank and access those funds,” Schmidt said.
“The great thing about the Canada Learning Bond is that money is there 35 years from when it’s opened. If a parent opens it when a baby is born, that person will have until age 35 to use that money. If it’s opened later, and I’ve opened up RESPs for 13-year-olds, it means they have that much more time to use it.”
Convenient, since many people are going back to school at older ages in this current era.
Parents must bring photo identification and their Social Insurance Number to the library session to open up an RESP, along with their child’s Social Insurance Number and birth certificate, or if the child doesn’t have either, Service Canada personnel will be available to start that paperwork ball rolling (people normally would go to the Service Canada office at 22 Bay St., but can do so at the Nov. 30 library event).
“It’s free. There’s no charge,” Schmidt added.
It’s up to parents how much they invest in an RESP, or how often.
“The amount I suggest with families is at least $25 a month to the RESP, it adds up,” Schmidt said.
Schmidt estimated Credit Counselling Service has helped bring $180,000 to Sault families for postsecondary education for children through helping parents with RESPs.
About 8,000 letters were mailed out by Credit Counselling Service earlier this year, advising parents of the RESP program.
Parents are eligible if their child was born in 2004 or later and their adjusted net family income is less than $45,916 annually.
All eligible children receive at least $500 and will receive $100 more for each year they’re eligible up to age 15 or a maximum of $2,000.
Parents can get more money for their child’s education with the Canada Education Savings Grant (CESG). If a parent is able to contribute his/her own savings to an RESP, the federal government will give a child an additional 20 per cent of what the parent deposited for free, up to a maximum of $600 per year. A parent could receive up to a lifetime limit of $7,200 per child in extra money to top off the savings put in.
“There’s no investment product where you get this amount of matching and this amount of return. It’s such an amazing program,” Schmidt said.
Schmidt said she can be contacted at Credit Counselling Service at (705) 254-1424 by anyone who has questions about RESPs, adding she will accompany parents to banks to assist them open up an RESP if required.
“I want to see kids signed up. Your kid has the right to this money,” Schmidt said.