RESP Eligibility and Contribution Rules

Before you can take advantage of the tax benefits and government grants that come with a Registered Education Savings Plan (RESP), it’s important to understand who is eligible to open, contribute to, and benefit from a RESP. While the rules are straightforward, knowing them upfront helps you avoid mistakes and maximize the impact of your savings.

This article breaks down the RESP basics—who can set up an account, who qualifies as a beneficiary, and what you need to know about contributions.

Who Can Open a RESP?

A RESP can be opened by any individual or entity, commonly referred to as the subscriber. This includes:

Eligible Subscriber	Details
Parents or legal guardians	Can open an RESP for their children.
Grandparents, relatives, or friends	No family relationship required.
Beneficiary (self)	If of legal age, can open their own RESP.
Organizations or institutions	Certain cases, such as group RESPs.

There is no requirement for the subscriber to be related to the beneficiary. However, they must have the beneficiary’s Social Insurance Number (SIN) to open the plan and receive government grants.

At Optimize, we often guide families in deciding who should be the subscriber based on tax considerations and estate planning goals.

Who Can Be a Beneficiary of a RESP?

A beneficiary is the person who will use the RESP funds to pay for their post-secondary education. To be eligible:

The beneficiary must be a Canadian resident with a valid SIN.
There is no age limit to be named as a beneficiary, but government grants (like the CESG) are generally only available until the beneficiary turns 17.

Note: Families with multiple children often choose a family RESP, which allows them to name more than one beneficiary and allocate funds flexibly.

RESP Contribution Rules: What You Need to Know

RESPs offer flexible contribution rules, but there are important limits and considerations:

There is no annual contribution limit.
However, there is a lifetime contribution limit of $50,000 per beneficiary.
Contributions are not tax-deductible, unlike RRSPs, but they grow tax-deferred within the plan.
Government grants like the CESG have their own annual and lifetime matching limits, which we'll cover in the next article.

Over-contributions beyond the lifetime limit result in a 1% per month penalty on the excess until it is withdrawn.

At Optimize, we help you plan contributions to maximize grants and stay well within these limits.

Other Important RESP Eligibility Rules

A few additional rules to keep in mind:

A beneficiary can be named to multiple RESPs by different subscribers, but the $50,000 lifetime contribution limit applies across all accounts.
Subscribers can change beneficiaries under certain conditions, especially within family plans, without triggering penalties.
Government grants may need to be repaid if eligibility rules are breached or funds are not used for qualifying education expenses.

We ensure these nuances are considered as part of your broader education savings plan.

How Optimize Helps You Navigate RESP Rules and Eligibility

At Optimize, we ensure your RESP is set up correctly and strategically from the start. We help you:

Determine who should be the subscriber based on your family’s situation.
Confirm beneficiary eligibility and plan for multiple children, if applicable.
Manage contribution schedules to stay within limits and maximize grants.
Coordinate RESP planning with your overall financial strategy, ensuring education savings fit within your bigger picture.
Monitor your RESP over time, helping you adjust as family needs evolve.

With Optimize’s guidance, you can confidently navigate RESP rules and focus on building meaningful education savings.