RESP for Divorced or Separated Parents in Canada: Rules and Options

When parents separate, an RESP follows the name on the plan, not the parenting arrangement. The person who opened the plan, the subscriber, keeps its rights until a court order or a written agreement moves them. This page explains who controls an RESP after a separation, the choices for a plan the parents held together, how two parents’ plans for the same child share the grant and the contribution limit, and what happens to a grandparent’s plan. The account basics are in the complete RESP guide, and every related guide is listed in the RESP hub.

Who controls the plan

The CRA’s RESP guide, RC4092, describes an RESP as “a contract between an individual (the subscriber) and a person (the promoter)”. The subscriber, or the joint subscribers, hold the plan’s rights. The child is the beneficiary and doesn’t control the plan.

Separation doesn’t change who the subscriber is. RC4092 lists the ways someone who didn’t open a plan can become its subscriber, and the one that applies here is an ex-spouse or former common-law partner who gets “the subscriber’s rights under the RESP as a result of a court order or written agreement for dividing property after a breakdown of the relationship.” If control should change, the separation agreement or a court order has to say so, and the provider then records it.

Options for a plan the parents held together

1. Keep the joint plan. A separation doesn’t end a joint plan. RC4092 says that “if you are both legal parents of the beneficiary, you and your former spouse or common-law partner can be joint subscribers under an RESP”, and separated parents can also “move an existing joint RESP to another promoter”. This works when the parents agree on contributions and withdrawals.

2. Move it to one parent. Under the separation agreement or a court order, one parent takes over the subscriber’s rights. The provider may record the change on the existing plan or transfer the money to a new plan in that parent’s name.

3. Split it into two plans. The money can be transferred into two new plans for the same child, one in each parent’s name.

A transfer to another RESP for the same child has no tax cost. Employment and Social Development Canada (ESDC) says most transfers “will have no tax implications” when the plans “have the same beneficiary”, though “there may be fees to transfer the RESP to another promoter”. The grants can move with the money as long as the receiving provider offers them: ESDC’s promoter guide lists, among the conditions for an eligible transfer of the grant, that “the transferring and receiving plans have a common beneficiary” and that “the receiving promoter must have a valid agreement with ESDC to offer the CESG”. The receiving provider checks the rest. The contributions already made still count toward the child’s lifetime limit after a transfer, since that limit covers the amounts contributed “to all RESPs for a beneficiary”.

Closing a plan is different. When an RESP closes, ESDC says “money received from benefits will be returned to the Government of Canada (or provincial government for provincial benefits)”, and the contributions go back to “the person who opened the RESP”. Asking the provider whether a proposed change counts as a transfer or a closure, before signing anything, keeps the grants from being lost by mistake.

Two plans for the same child

Separated parents can each open their own plan for the child: ESDC says “you can be named as the beneficiary on more than 1 RESP”. That avoids having to agree on every decision, but the plans are still linked in two ways.

The grant follows the child, not the plan. The basic Canada Education Savings Grant (CESG) is paid on up to $2,500 of contributions a year for the child, however many plans there are. If each parent puts in $2,500, the child still receives the grant on $2,500 that year, plus any catch-up. ESDC says grant payments “are made to a single plan on a first-come, first-served basis”, so the grant goes to the plan that received the earlier contribution; when both contributions are made on the same date, “each plan receives one half of the CESG”. Splitting the grant-earning amount (for example, $1,250 each) collects the same grant with less money. How catching up missed years works is covered in our guide to maximising the CESG.

The lifetime limit is shared. There is an excess contribution at the end of any month when all subscribers' contributions to all RESPs for a beneficiary (not counting government grants) exceed the $50,000 lifetime limit; each subscriber pays 1% a month on their share until it is withdrawn, filed on Form T1E-OVP, and withdrawn amounts still count toward the limit. Our RESP overcontribution guide shows how each subscriber’s share is worked out.

ESDC’s advice for a child with more than one plan is that “it is important for subscribers to let each other know about their contributions.” A shared record of what each parent puts in each year keeps both the grant and the limit in view.

Grants that depend on the primary caregiver

Some grant amounts depend on income. ESDC says adjusted family income “is the amount used, in part, to determine eligibility for the CLB and the amount of the CESG”, and it is “the primary caregiver’s, and their spouse/common-law partner’s pre-taxed income”. The primary caregiver is “the person who is eligible to receive the Canada Child Benefit in the child’s name”, who after a separation may not be the parent whose name is on the plan. ESDC adds that “the signature and Social Insurance Number of the primary caregiver or of their cohabiting spouse or common-law partner, are required when requesting certain benefits.” The amounts at each income level are in our CESG guide.

What a separation agreement can cover

A family lawyer or mediator can draft these terms.

If the child doesn’t go to school

RC4092 says that if the contributions aren’t paid out to the beneficiary, “the promoter usually pays them to the subscriber at the end of the contract”, and the subscriber doesn’t pay tax on them. The separation agreement’s terms decide how they’re shared between the parents. ESDC says the CESG can be shared with a sibling who has grant room; otherwise it goes back to the Government of Canada, and an unused Canada Learning Bond (CLB) must be returned.

The investment income can be paid out as an accumulated income payment (AIP). RC4092 lets a subscriber who “acquired the former subscribers’ rights as a consequence of marriage breakdown” reduce the taxable AIP by moving up to $50,000 of it into their RRSP, the same as an original subscriber, as explained in transferring an RESP to an RRSP. The other options are compared in what happens if your child doesn’t go to university.

When one parent drains the plan

A subscriber can take contributions back: RC4092 says “the promoter may return the subscriber’s contributions to the subscriber, tax-free”. Whether one joint subscriber can act alone depends on the plan contract, which the provider can explain. A parent who thinks RESP money is being misused can:

1. document the balance and the contributions made by each parent;
2. talk to a family lawyer, since family courts can stop a spouse from using up property while a claim is decided. Section 12 of Ontario’s Family Law Act lets the court make an order “restraining the depletion of a spouse’s property”, and section 91 of British Columbia’s Family Law Act lets it make an order “prohibiting the other spouse from disposing of, transferring, converting, or exchanging into another form, property in which the applicant may have an interest”. Whether an RESP is covered depends on the province and the facts;
3. give the provider a copy of any court order; and
4. raise the withdrawals in the property settlement.

Grandparents’ plans

A grandparent’s RESP stays with the grandparent, and neither parent can direct it. A grandparent can keep contributing through the parents’ separation and can later name a different grandchild as the beneficiary. If the plan contract allows a replacement, ESDC’s promoter guide treats it as eligible, so the grant stays in the plan, when the new beneficiary is under 21 and a sibling of the original one, or when both are under 21 and related by blood or adoption to the original subscriber. That is how a grandparent can switch to a cousin. The CLB is the exception: it belongs to the child it was paid for, so “the promoter must repay the CLB account balance of the original beneficiary, even if they met the conditions for an eligible beneficiary replacement.” How the contribution history moves on a change is covered in changing an RESP beneficiary.

Common questions

Can separated parents open a new joint RESP?

Yes, if both are the child’s legal parents. RC4092 says “divorced or separated individuals who are both legal parents can jointly open RESPs for one or more of their children”.

Who gets the contributions back if the plan is closed?

The subscriber. ESDC says personal contributions “will be returned to the person who opened the RESP and will not be taxed”. For a joint plan, the separation agreement can say how the refund is split.

If both parents contribute to their own plans, which plan gets the grant?

The plan that received the earlier contribution, up to the yearly grant limit for the child. When both contributions are made on the same date, the grant is split in half between the two plans.