Heritage Plan Withdrawal Rules and Guidelines

You’ve worked hard to save for your children’s education, and soon it will be time to start withdrawing from a Heritage Plan Registered Education Savings Plan (RESP) to help fund their post-secondary schooling.  Your RESP may include your contributions, grant money, bond money, and investment earnings, and there are certain rules for the Heritage Plan withdrawal process that depend on the beneficiary’s educational choices, as well as the contents of your plan.

If you’re ready to dip into those education savings, here are some tips and guidelines on RESP withdrawal rules you need to know.

What is an EAP?

When you take money from a Heritage Plan, it’s important to know whether you’re withdrawing your own contributions or other funds from the plan to ensure you’re following the correct RESP withdrawal regulations for the beneficiary’s educational situation.

An Education Assistance Payment (EAP) withdrawal is a payment of earnings and incentives from a Heritage Plan RESP to help an eligible beneficiary pay for covered expenses associated with their attendance at an accredited post-secondary institution, according to the Government of Canada website. EAPs are available in the second through fourth year of eligible educational enrollment.

An EAP may include investment earnings, CESG (Canada Education Savings Grant), additional CESG, CLB (Canada Learning Bond), and any eligible provincial incentives, but it does not include your contributions.  According to RESP withdrawal rules, beneficiaries pay tax on EAP withdrawals for eligible post-secondary expenses, while contribution withdrawals are not taxed in their hands.

Your RESP Maturity Withdrawal Options

Heritage Plans mature on July 31st of the year in which the beneficiary turns 18. Once the plan matures, you’ll need to choose either the Scholarship or Self-Determined option. The details of your options depend on whether the maturity date falls on or before July 31, 2014, or on or after July 31, 2015.

Here’s a great video we created to help you better understand the plan maturity process.

Note: Last summer we made some plan changes that relaxed our EAP requirements to the minimum specified in the Income Tax Act Canada. Please visit for more information.

The Self-Determined option may be the best selection for beneficiaries choosing programs less than 2 years long, or for those who don’t attend post-secondary school at all. With this option, a subscriber may request the return of the principal contributions anytime between the maturity date and up to 35 years from the plan application date. Sales charges aren’t returned, however investment earnings may be paid out in the form of an Accelerated Income Payment (AIP) if qualifying conditions are met.

The Heritage PlanTM scholarship  maturity option suits students enrolled in 2, 3, or 4 year eligible programs. Under this option, the subscriber’s contributions (less applicable fees) may be withdrawn after the plan maturity date in order to help pay for the first year of eligible studies. Additionally, up to 100 percent (depending on the scholarship option) of the sales charges incurred may be returned to you to help pay for the educational expenses. In second and subsequent years up to year four, EAPs may also help fund eligible education studies with the Scholarship option.

Can My RESP Contributions Get Transferred To Someone Else?

If a beneficiary chooses not to attend an accredited post-secondary institution, there are Heritage Plan RESP withdrawal rules that provide other options for transferring some of the RESP funds. If you have a Heritage Family Plan, the funds may be transferred to another child within the plan, as long as that child hasn’t exceeded the $50,000 RESP lifetime limit. Another option is for up to $50,000 of your contributions and their accumulated investment earnings to roll into your (or your joint contributor’s) RRSP, as long as the contribution room is available.

Whether your child plans to attend an eligible post-secondary institution or not, learn about your RESP withdrawal options ahead of time to ensure you make the best decision for your situation.

For more information, visit our website at, call us at 1.800.739.2101, or chat with us online.