Top 5 Family RESP Questions You Need to Know

If you’re saving for a child’s post-secondary education, a registered education savings plan (RESP) stands out as one of the best tools in Canada. No other account gives you direct access to thousands of dollars in government grants—essentially free money for tuition and other educational expenses—while offering tax-deferred growth on your investments. For families with more than one child, a family RESP can provide useful flexibility when sharing funds and grants among beneficiaries.

What is a family RESP?

Canadians can open either individual or family RESPs. Both are registered with the federal government and allow investments to grow tax-deferred until the money is withdrawn for educational purposes.

Key features that apply to both individual and family RESPs include:

• The lifetime RESP contribution limit per beneficiary is $50,000.
• A beneficiary may be named on more than one RESP (for example, if a parent and a grandparent each open a plan), but total contributions across all plans cannot exceed $50,000 for that beneficiary.
• The Canada Education Savings Grant (CESG) matches 20% of the first $2,500 contributed to an RESP each year, which amounts to up to $500 per year in CESG for that beneficiary.
• Families with adjusted net income below a threshold (for 2023, $106,717) can qualify for Additional CESG, which can add up to $100 more annually after a minimum contribution of $500.
• The lifetime CESG maximum, including any Additional CESG, is $7,200 per child.
• Low-income families may qualify for the Canada Learning Bond (CLB) without making any personal contribution, up to a lifetime maximum of $2,000 per eligible child.
• Some provinces offer extra grants—for example, British Columbia provides up to $1,200 and Quebec may provide up to $3,600 in additional support for eligible families.
• RESP contributions do not generate an immediate tax deduction like an RRSP, but contributions can be withdrawn tax-free later. Government grants and investment growth are taxable when withdrawn as educational assistance payments and are generally taxed in the student’s hands at their likely low marginal rate.
• You can convert an individual RESP into a family RESP, and you can add or remove beneficiaries on most plans subject to eligibility rules.

Below are five common questions about family RESPs and clear answers to help you decide if a family plan is right for your household.

1. How are funds in a family RESP divided among beneficiaries?

Family RESPs are flexible. Except for the CLB (which must go to the named beneficiary), government grants and the investment growth in a family RESP can be allocated among beneficiaries in any way the plan holder chooses. The distributions do not have to be equal. That means you can direct more funds toward one child who needs them for higher education costs while another child uses less. You can also make withdrawals for one child’s post-secondary education while another beneficiary remains in school and continues to accumulate grants.

2. What if one or more beneficiaries don’t use their RESP funds?

If a beneficiary doesn’t pursue post-secondary education, a family RESP allows you to reallocate that child’s unused grant money and growth to other beneficiaries in the plan. If none of the beneficiaries attends school, you have several options:

• Keep the RESP open in case a beneficiary decides to enroll later.
• Withdraw your original contributions tax-free. Investment earnings and government grants must be handled according to rules: grants are returned to the government, and earnings can be transferred to an RRSP as an Accumulated Income Payment (AIP) if certain conditions are met.
• An AIP transfer is limited to $50,000. To qualify, the RESP must have been open at least 10 years, beneficiaries must be at least 21 years old and not enrolled in post-secondary studies, and you must have sufficient RRSP contribution room to receive the transfer.
• If you close the RESP and do not transfer earnings into an RRSP, investment earnings will be taxed and government grants will be returned.

3. Can you add another generation of beneficiaries to an existing family RESP?

No. Family RESPs require that all beneficiaries be related by blood or adoption, and they must be siblings. That means you cannot add grandchildren to a family RESP that was originally set up for the grandchildren’s parents. Also keep in mind that RESPs have a maximum lifespan—generally 35 years from opening—so adding a much younger beneficiary late in the plan’s life may limit the time available for that child’s savings to grow.

4. Is there a limit to the number of beneficiaries in a family RESP?

There is no fixed limit on how many beneficiaries you can add to a family RESP, provided each beneficiary is under age 21 at the time they are added and all beneficiaries meet the family relationship requirement (siblings or adopted children). That flexibility lets you include multiple children under one plan while managing contributions and grant allocations across the family.

5. Are the same government incentives available for family RESPs?

Yes. Family RESPs are eligible for the same federal incentives as other RESP types: the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB). The same eligibility rules apply, including contribution limits and income-related additional CESG provisions. Provincial RESP grants for families in provinces that offer them are also available based on each province’s criteria.

More about RESPs

• You opened an RESP—now what?
• Is an RESP worth it? Yes, even if only for the government grants
• What is the RESP contribution deadline?
• Reducing risk in an RESP: How to invest as your kid approaches college or university