plan is taxed in the child’s hands at his or her lower tax rate. As of 2007 there is no annual contribution limit but the total
lifetime ceiling is $50,000 per beneficiary. RESPs are oſten set up as family plans so you can allocate the plan assets among related children or change the beneficiary of the plan to someone else in the family. One of the key benefits of an RESP is that the federal govern-
ment pays a subsidy called the Canada education savings grant (CESG) for each child who is a beneficiary of an RESP from the day the child is born to his or her 17th birthday. Payments made to an RESP under the CESG or under a designated pro- vincial program are not included when determining if the life- time limit has been exceeded. The current annual maximum CESG per beneficiary is $500,
which is 20% of the first $2,500 of contributions paid annually. Each child is entitled to a cumulative CESG limit of $7,200. In some cases the CESG will have to be repaid. This can happen if the beneficiary doesn’t pursue higher education or the plan is terminated.
Old Age Security: in 2014 the maximum annual OAS pension was $6,676.59. Clawback of OAS begins at net income of $71,592 (the threshold amount.) All OAS will be clawed back at net income of $116,103, since 15% of any income in excess of
OAS and CLAWBACK LIMITS Year
Maximum OAS pension
2015 2014 2013 2012 2011
$6,764.88 $6,676.59 $6,579.06 $6,510.60 $6,368.25
Minimum income recovery threshold
$72,809 $71,592 $70,954 $69,562 $67,668
Maximum income recovery threshold
$117,909 $116,103 $114,815 $112,966 $110,123
the threshold amount is clawed back. For 2015 the maximum annual OAS pension is $6,764.88
based on the $563.74 maximum monthly amount for the first quarter of 2015. Note that the OAS pension is adjusted for infla- tion on a quarterly basis so this amount will probably increase during 2015.
DAVID TRAHAIR, CPA, CA, is a financial writer, speaker and author of five books on personal financial issues (his website is
www.trahair.com)
Masters of Financial Accountability (MFAc) York University, Toronto, Canada
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The MFAc tackles the most urgent issues facing the corporate world and the global economy: • Improving corporate accountability through better governance • Creating a culture of accountability, ethical behavior, sustainability and corporate social responsibility • Advanced governance techniques (stakeholder theory, enterprise risk management, executive compensation & integrated reporting) • Accountability and governance issues in the public and not for profit sectors
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Masters of Financial
Accountability.indd 1 APRIL 2015 | CPA MAGAZINE | 41 2/9/2015 9:47:16 AM
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