Have you noticed it yet? That slight briskness in the air first thing in the morning before the sun starts to heat things up? It’s one of my favourite things about this time of year – that sense that even though the thermometer still can push 30, fall is not far off and before you know it, we’ll be digging out our sweaters, eating dinner inside instead of on the patio and back into the routine of a new school year.
As parents, we all want to make sure our kids are well-equipped for their educations, and this means not just the annual back-to-school shopping trips but also planning for their post-secondary educations.
Thanks to the government of B.C., parents now have a new tool in their toolkit to start their preparations nice and early: the British Columbia Training and Education Savings Grant, or the BCTESG. As part of our commitment to building a richer future for youth, on Aug. 24 Coast Capital Savings became one of the first financial institutions in B.C. to offer it.
The BCTESG is a great opportunity to kick-start education savings. It’s a one-time $1,200 grant offered by the provincial government and deposited into a Central1 Trust RESP account. Like all RESPs, it grows tax-free until your child withdraws the money to put towards full- or part-time training or education at an accredited post-secondary school or training program.
Setting up the Central1 RESP account and applying for the grant is pretty simple and any of one of our branches are happy to get you started, but there are a few boxes that have to be ticked to confirm who is eligible.
First, there is an age requirement. The child who will be the beneficiary of the BCTESG must have been born on or after Jan. 1, 2007. The application can only be made once the child turns six years old but must be made before that child turns nine. However, since this is a new program, the government has extended the deadline for application until the day before the child’s ninth birthday or Aug. 14, 2018 – whichever date is later – for children who turned six in 2013, 2014 or 2015.
Second, you have to make sure that the child who will be the beneficiary of the BCTESG already has a RESP account in their name. If the child doesn’t yet have one, this is a great motivation to get one started because there are few investments into a child’s future that pack as much punch.
You don’t need a large initial investment to open an RESP account and another government grant, the Canadian Educations Savings Grant (CESG), really makes RESPs worthwhile. The CESG can add an extra 20 per cent to your RESP investments each year to a maximum of $500 annually per child. Keep in mind though that the BCTESG can’t be used to fund an RESP account and access the CESG using that $1,200 – the BCTESG is a standalone incentive. It’s in your best interest to make the most of all of the RESP opportunities available to you. Not only can you tap into the CESG by opening an RESP account, but all the money earned in an RESP is tax-free until the child starts to withdraw it to use for school. At that point, only the accumulated interest is taxable as income. Plus, anyone can contribute to a child’s RESP for birthdays, Christmas or special occasions. It’s a gift that grows along with the child.
Finally, although the child’s parent or guardian must live in B.C., you don’t have to be the parent to apply on their behalf. This means that grandparents, aunts and uncles, or other loved-ones can help a child take advantage of the BCTESG.
Because only children between the ages of six and nine are eligible, applications must be made in person so that identification can be checked. Before you head to a branch to apply, make sure you have:
• The child’s birth certificate and, if possible, social insurance number.
• Your own social insurance number if you’re applying on a child’s behalf.
The BCTESG is a fantastic new tool to support families in starting to save for their children’s post-secondary education but there’s a lot to think about when planning for your child’s education – it means looking at the big picture. Once the kids are settled back into school, I invite you to book an appointment at your nearest Coast Capital branch for a Where You’re At Money Chat to discuss not just how we can help you take advantage of the BCTESG, but what we can do to help you achieve overall financial well-being this fall.
Kathy McGarrigle is Chief Operating Officer for Coast Capital Savings (www.coastcapitalsavings.com), Canada’s largest credit union by membership.