Educational assistance payments (EAP)

An educational assistance payment (EAP) is the amount paid to a beneficiary (a student) from an RESP to help finance the cost of post-secondary education. An EAP consists of the Canada educational savings grant (CESG), the Canada learning bond (CLB), amounts paid under a designated provincial program and the earnings on the money saved in the RESP. The promoter reports EAPs in box 42 on a T4A slip and sends a copy to the student. The student includes the EAPs as income on his or her return for the year the student receives them.

The promoter can only pay EAPs to or for a student if one of the following situations applies:

• The student is enrolled full time in a qualifying educational program. This includes students attending a post-secondary educational institution and those enrolled in distance education courses, such as correspondence courses, provided by such institutions; or
• The student has attained the age of 16 years and is enrolled part-time in a specified educational program.

A beneficiary is entitled to receive EAPs for up to six months after ceasing enrolment, provided that the payments would have qualified as EAPs if the payments had been made immediately before the student’s enrolment ceased.

Limit on EAPs - For RESPs entered into after 1998, the maximum amount of EAPs that can be made to a student as soon as he or she qualifies to receive them is:

• For full-time studies - $5,000, for the first 13 consecutive weeks of full-time studies in a qualifying educational program. After the student has completed the 13 consecutives weeks, there is no limit on the amount of EAPs that can be paid if the student continues to qualify to receive them. If there is a 12-month period in which the student is not enrolled in a qualifying educational program for 13 consecutive weeks, the $5,000 maximum applies again; or
• For part-time studies - $2,500, for the 13-weeks period of enrollment in part-time studies in a specified educational program preceding the payment of an EAP.

Subject to the terms and conditions of the RESP, the promoter can supplement the $5,000 or $2,500 EAP by paying a portion of the contributions tax-free to the beneficiary.

Human Resources and Skills Development Canada may, on a case-by-case basis, approve an EAP amount of more than the above limit if the cost of tuition plus related expenses for a particular program is substantially higher than the average. For information on how to request approval of an EAP of more than $5,000 or $2,500, promoters should call 1-888-276-3624.