Canada Learning Bond: Free Money to Jumpstart Your Kids’ RESP

Canada Learning Bond is one of the Government of Canada programs to encourage savings for post-secondary education.

It is free money that you can use to jumpstart your children’s RESP account

In this post, you’ll learn about CLB, how much you can expect to receive, the eligibility conditions and how to apply for it.

What is Canada Learning Bond (CLB)

Canada Learning Bond is a Government of Canada program that adds money to the RESP account of qualified children.

Unlike the CESG that is available for everyone, CLB is setup to encourage lower income families to save for their children post-secondary education.

It is not a matching program so you don’t need to contribute to the RESP to receive the money.

How Much Is The CLB?

Each eligible child can receive up to a lifetime limit of $2,000 in CLB:

  • First Year: $500
  • Subsequent Years: $100 for each year the child remains eligible till they turn 15.

Again, no contribution is required to receive this money from the government.

There’s a $25 in the first year to cover the cost of opening an account. Some RESP providers keep the money while others put it in your RESP account.

When I moved to Canada and opened an RESP for our child at Questrade, and the $25 was deposited into his account.

Related Post: Best RESP Providers

Who is Eligible for Canada Learning Bond (CLB)

To qualify for the CLB, the following eligibility conditions must be met:

  1. The child is named as the beneficiary of an RESP
  2. The child was born on or after January 1, 2004
  3. A resident of Canada with a valid social security number (SIN)
  4. The family’s adjusted income meets the Income criteria

The Income Eligibility for CLB is based on the number of qualified children in a family and the family’s adjusted income.

The Family’s adjusted income is the total of the incomes for the primary caregiver and any spouse or common-law partner’s income.

The table below show the income eligibility thresholds for July 1, 2020 to June 30, 2021

Number of ChildrenAdjusted Family Income
1 to 3Less than $48,535
4$54,764
5$61,016
Income eligibility threshold for Canada Learning Bond (CLB)

Check the link above for the income threshold for families with more than 5 children.

How do you Apply for Canada Learning Bond?

Assuming you meet all eligibility criteria listed above, the first step to start receiving the free money under CLB is to open an RESP account with your kid as the beneficiary.

Don’t have an RESP for your kids yet? Go here to read how to open an RESP and start saving for your kid’s education.

Note that some RESP providers don’t handle CLB. If you believe you’ll be eligible for the money, you definitely want to confirm from the providers before opening an account.

Usually, you’ll be able to apply for the Canada Learning Bond (CLB) and Canada Educational Savings Grant (CESG) when opening your RESP account.

Once approved, the CLB payments will be automatically deposited into the RESP account for the first year and for all subsequent years that your kid is eligible.

In summary, here are the steps to apply for the Canada Learning Bond:

  1. Get all the Required Documents
  2. Ensure your tax returns are up to date since the CLB is income tested
  3. Open an RESP account with a provider that can receive CLB payments
  4. Apply for the CLB through the RESP provider
  5. The money is deposited into the RESP account

Some FAQs

How much can I get from CLB?

Each eligible child can receive $500 in the first year and $100 for each subsequent year they remain eligible. The lifetime cap is $2,000.

Can the CLB be received retroactively?

Yes, you can catch up on previous years’ CLB payments. When you apply, your eligibility for prior years are determined and the money will be deposited into your account.

Can I receive both CLB and CESG at the same time?

Yes, the two programs are separate so you can receive both.

How much do I need to contribute to receive CLB?

You don’t need to contribute any money to your child’s RESP to receive CLB. Once they are eligible, the money will be automatically paid.


Conclusion

If you’re still on the fence about opening an RESP for your child(ren), now is the time to take action.

Even if you’re ineligible for CLB, you can still get the government’s 20% annual match of your contributions. That’s free $500 per year to put towards your kid’s education.

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Simon is a CPA by day and a Personal Finance Blogger by night. With over a decade experience in financial services, he's passionate about personal finance, investing and helping people take control of their financial life.

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