By Sheryl Smolkin

You’ve been diligently socking away money in a Registered Educational Savings Plan (RESP) since your child was a toddler and in a few short weeks she starts university. Getting at the money can be a little more complicated than simply taking out money from your savings account. To help you through the process, this week we feature articles and blogs exploring all things relating to RESP withdrawals.

Mike Holman on Money Smarts discusses RESP withdrawal Rules and Strategies for 2015. He says there is one withdrawal rule to get out of the way – you are only allowed to take out $5,000 of accumulated income in the first 13 weeks. After 13 weeks, you can withdraw as much accumulated income (including educational assistance payments) as you wish.  However, there are no limits to withdrawals from the contribution portion as long as your child is attending school.

Bankrate.com blogger Jasmine Miller also writes about How to cash out your RESP. Because the government stipulates that financial institutions must follow “due diligence” to ensure RESP funds are being used for a child’s education your bank may want to see a copy of your child’s acceptance letter before releasing funds or they may take you at your word. Therefore she says it’s a good idea to keep all documentation and receipts.

The Investing for Me blog Withdrawals from RESPs notes that RESP withdrawals can generally be made to cover tuition, room and board, school supplies, computers and transportation as these are all eligible educational expenses under the Human Resources and Skills Development Canada (HRSDC) criteria. However, guidelines for withdrawals from a Group RESP account are governed by the plan’s contract or prospectus and group plans may have more restrictions than family or individual plans.

But what if your child doesn’t continue her education? Get Smarter About Money explains that if your child doesn’t continue her education after high school, there may be financial costs and tax consequences. But you have these four available options:

1. Keep the RESP open – your child may decide to continue her studies later,
2. Transfer the money to another beneficiary,
3. Transfer the money to your RRSP,
4. Close the RESP.

In Need to use an RESP this fall? Back to school starts now, Rob Carrick covers some of the same territory as the blogs noted above. However, he says one more consideration in filling out the RESP withdrawal form is where you want the money to go. You can have it sent to your chequing account, or your child’s account. He has the money from his son’s RESP paid into his and his wife’s joint account, and then he pays tuition and residence bills via Interac online.

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