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
Canada Learning Bond Eligibility
To qualify for the CLB, the following eligibility conditions must be met:
- The child is named as the beneficiary of an RESP
- The child was born on or after January 1, 2004
- A resident of Canada with a valid social security number (SIN)
- 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 shows the income eligibility thresholds for July 1, 2022 to June 30, 2023:
| Number of Children | Adjusted Family Income |
|---|---|
| 1 to 3 | $50,197 or less |
| 4 | $56,636 |
| 5 | $63,101 |
Check the link above for the income threshold for families with more than 5 children.
How to 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:
- Get all the Required Documents
- Ensure your tax returns are up to date since the CLB is income tested
- Open an RESP account with a provider that can receive CLB payments
- Apply for the CLB through the RESP provider
- The money is deposited into the RESP account
Some FAQs
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.
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.
Yes, the two programs are separate so you can receive both.
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.
Canada Learning Bond (CLB) was introduced in 2004 by the federal government of Canada.Â
Canada Learning Bond is paid annually for each child account so long the child remains eligible till they turn 15.Â
CLB is paid directly into a child RESP account annually.
It depends on the duration it takes to process and approve your application. Subsequently, you will receive an annual deposit directly in your child’s RESP account until they turn 15.
You will have to pay back the Canada Learning Bond and any earned grant when your child didn’t attend post-secondary school after high school.Â
The Canada Learning Bond income threshold is based on the family-adjusted income number of eligible children.
The CLB income eligibility for 2022/2023 is $50,197 or less for families with 1-3 children and $56,636 for families with 4 children.
Click here to get the income threshold for families with more than 5 children.
CLB is not taxable. However, any investment earnings from the deposit will be taxed at a lower rate when your child withdraws it.
Yes, CLB is retroactive. This means your child can claim all the benefits they were entitled to in the previous year.
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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