RESP Beneficiary Change Canada: Rules, Grants and How to Do It

A subscriber can change the beneficiary of an RESP whenever they like. The question that matters is what happens to the grants, and that depends on who the new beneficiary is and how old they are. This page covers those rules and how to make the change. The account basics are in the complete RESP guide, and every related guide is listed in the RESP hub.

Why families change the beneficiary

• The original beneficiary won’t be going to post-secondary school, and a younger child might.
• A plan was opened for one child before a brother or sister was born.
• A grandparent opened a plan for one grandchild and wants to redirect it.
• The original beneficiary has died.

When the reason is that the child won’t be going to school, a new beneficiary is one of several options; the others are compared in what happens if your child doesn’t go to university.

What happens to past contributions

When the CESG stays in the plan

The CESG already paid into the plan can stay there if either of these is true:

If neither applies (for example, the new beneficiary is a family friend’s child, or is 21 or older and not a sibling), the CESG paid into the plan goes back to the government. The contributions and the investment growth stay in the plan and can be used for the new beneficiary.

The second rule is what lets a grandparent move a plan between grandchildren who are cousins, as long as both are young enough.

Even when the grant stays, it doesn’t add to what the new beneficiary can receive: the CESG paid out to any one student can’t exceed the $7,200 lifetime limit, counting grant that came from a sibling.

The Canada Learning Bond and provincial grants

The Canada Learning Bond doesn’t move to a new beneficiary: the bond paid for the former beneficiary is repaid even when the change meets the rules that keep the CESG. Provincial grants (such as BC’s BCTESG and Quebec’s QESI) have their own rules. Before changing a beneficiary on a plan that holds any of them, ask the provider exactly what will move and what will be repaid. The bond itself is described in the Canada Learning Bond section of our RESP guide, and the provincial grants in our guide to maximising the CESG.

Family plans work differently

In a family plan, several beneficiaries already share one account. When one of them doesn’t go to school, a brother or sister already on the plan can use the money, with no beneficiary change at all. A family plan can have several beneficiaries, each connected by blood or adoption to every living subscriber; a beneficiary must be under 21 when named (except on a transfer from another family plan), and contributions can be made for beneficiaries under 31. How grants are tracked in a shared plan is covered in can siblings share an RESP.

Timing: the age cutoff

Both grant-keeping rules need the new beneficiary to be under 21, and the related-to-subscriber rule needs the former beneficiary to be under that age too. A family that waits until the younger child passes that birthday loses the choice.

Example. The older child, 20, has decided not to go to school, and a brother is 17. Changing the beneficiary now keeps the CESG, because the brother is under 21 and they share a parent. If the family waits 4 years, the brother is past the cutoff and the change would send the grant back.

The plan’s own end date is separate: it runs from the date the plan was opened, not from either child’s age.

How to change the beneficiary

1. Check the rules above for the new beneficiary’s age and relationship.
2. Ask the provider for its beneficiary change form, and ask in writing what happens to the CESG, any Canada Learning Bond and any provincial grant.
3. Provide the new beneficiary’s Social Insurance Number and proof of the relationship if asked.
4. The provider reports the change to the government; there is nothing for the subscriber to file.

Group scholarship plans have their own contract terms, and some may not allow a change, so check with the plan first; our comparison of RESP providers covers the difference.

If no eligible beneficiary is left

When there is no one under the age cutoff to take over, the plan can still stay open in case the original beneficiary enrols later. If no one will use it, the grants are repaid and the income can come out as an accumulated income payment, part of which can be rolled into the subscriber’s RRSP, as explained in transferring an RESP to an RRSP.