Canada Learning Bond (CLB): A Kick-Start For Your Child’s RESP

If saving for your child’s future post-secondary education feels out of reach, the Canada Learning Bond (CLB) can help you get started. This federal government grant offers up to $2,000 to eligible families to help them grow their child’s Registered Education Savings Plan (RESP), even if you aren’t able to contribute right away.

What is the Canada Learning Bond?

The CLB is a government grant specifically designed to help low-income families begin saving for their child’s education. The program is funded by Employment and Social Development Canada (ESDC) to ensure children from modest-income families have a fair chance of obtaining a post-secondary education.

Unlike the Canada Education Savings Grant (CESG), which requires a certain contribution into your child’s RESP account, the CLB does not. Whether your child attends college, university, trade school, or another eligible post-secondary institution, the CLB can help cover some of the costs.

Eligibility Requirements

Not all children are eligible to receive money from the Canada Learning Bond. Eligible children must meet the following criteria:

• Your child must be born in 2004 or later.
• They need a valid social insurance number (SIN).
• You, the primary caregiver, must receive the Canada Child Benefit (CCB).
• Your household income must fall below a certain threshold.
• Open a Registered Education Savings Plan with an approved provider.

For 2024, the income eligibility requirements were $55,867 for families with 1 to 3 children. For families with more than 3 children, adjusted income levels are considered.

How Much Can You Receive for Your Child’s Education After High School?

The CLB provides a maximum of $2,000 per eligible child for their post-secondary education savings. The money is issued in two separate stages:

• Stage 1: $500 for the first year of eligibility.
• Stage 2: $100 for each additional year of eligibility, up until they turn 15.

For example, if your child qualifies for the CLB at birth and remains eligible until they are 15, they would get the full $2,000 deposited directly into their RESP account.

In contrast, if your child becomes eligible at age 10, you would receive $500 the first year, and $100 each year after for the next five years, totalling $1,000. But note that retroactive payments are possible.

How to Apply and Open a Registered Education Savings Plan (RESP)

If you’ve yet to open an RESP account and apply for the Canada Learning Bond, here’s what you need to do:

1. Get a social insurance number (SIN) for your child. You can apply for one at a Service Canada office or online.
2. Choose an approved RESP provider such as a bank, credit union, or education savings company like Embark.
3. Open an RESP in your child’s name. You won’t need to make an initial payment to the account to qualify for the.
4. Fill out the CLB application. Once approved, the money will be deposited directly into your RESP.

Catch-Up: Claiming Retroactive CLB Entitlements

If your child qualifies for the Canada Learning Bond from previous years but hasn’t received any money, you can claim retroactive payments. This means that you’ll receive a lump sum for all years of eligibility, up to the lifetime maximum.

Additionally, youth aged 18 to 20 can also apply for the CLB themselves, as long as they still meet the income requirements from when they were younger.

Using the CLB: Withdrawals, Taxes & Eligible Expenses

Once your child is enrolled in a post-secondary education program, the grant money from the CBL will be pooled into other funds (government grants and investment income) and withdrawn as an Educational Assistance Payment (EAP). Here’s how withdrawals work:

• EAPs are taxed in your child’s name, not yours.
• As most students have little or no taxable income during the time they are in school, they will often pay little to no tax on these withdrawals.

The funds can be used toward a wide range of educational expenses, including:

• Tuition
• Textbooks
• Housing and meal plans
• Public transit passes
• Tools or equipment for trade school programs

Pairing the CLB with Other Education Grants

The Canada Learning Bond is just one of many grants available from the government of Canada when you open an RESP. Other grants your beneficiary can receive include:

• The Canada Education Savings Grant (CESG) matches 20% of your contributions up to $500 per year, up to a lifetime maximum of $7,200.
• The Additional CESG offers an extra 10% to 20% on the first $500 contributed annually for eligible low and middle-income families.

Beyond federal grants, provincial grants are also available:

• British Columbia Training and Education Savings Grant (BCTESG).
• Quebec Education Savings Incentive (QUESI).

The benefit of opening an RESP is that multiple grants can be pooled together to fund a portion of your child’s education after high school, even if you have a modest household income.

For example, a child who receives the CLB, CESG, and a provincial grant like the QESI could see thousands of dollars added to their RESP over the years, even if the family only makes smaller personal contributions to their child’s education account.

Final Thoughts

If you qualify for the Canada Learning Bond, you don’t need to wait until you have money to put toward savings. By opening an RESP and applying for the grant money, you can secure up to $2,000 in free CLB funds for your child’s education.

Remember, the earlier you start, the more time you have to grow your money. And with Embark, we make it easy to open an RESP online, track your grant progress and savings goals, so your child is finally set once the time comes for them to attend school.

For more information about Embark’s RESP accounts, contact us to speak with an Education Savings Specialist today!