Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Whether the student's enrolment in XXXXXXXXXX qualifies for an Educational Assistant Payment under the Act.
Position: Yes
Reasons: A qualifying educational program includes students attending a post-secondary school level program of courses at an institution described in subparagraph (a)(ii) of the definition "designated educational institution" in subsection 118.6(1), of a technical or vocational nature designed to furnish a person with skills for, or improve a person's skills in, an occupation.
November 18, 2013
Mark Legault, Manager K Hooey
Deferred Income Plan Section Financial Industries and
Specialty Products Policy Section Trust Division
Registered Plans Directorate Income tax Rulings Directorate
2013-047428
Education Assistance Payments
This is in response to your question whether an Education Assistance Payment ("EAP") can be paid from a Registered Education Savings Plan ("RESP") to a beneficiary who is XXXXXXXXXX years old (the "Individual") and enrolled in XXXXXXXXXX.
XXXXXXXXXX.
An educational assistance payment (EAP) may be paid from an RESP where the beneficiary is enrolled as a full-time or part-time student in a qualifying educational program at a post-secondary educational institution. The terms "post-secondary educational institution" and "qualifying educational program" are both defined in subsection 146.1(1) of the Income Tax Act (the "Act"). In general, a "post-secondary educational institution" is defined to include a university, college, or other designated educational institution in Canada. A designated educational institution includes those educational institutions in Canada that are certified by the Minister of Human Resources and Skills Development Canada (HRSDC) to be an educational institution which provides courses that furnish a person with skills for, or improve a person's skills in, an occupation. A "qualifying educational program" is defined as an educational program at the post-secondary school level that is at least three consecutive weeks long and that requires the student to spend not less than 10 hours per week on courses or work in the program. "Post-secondary school level" is considered a qualifying educational program where it includes a program of courses at an educational institution certified by HRSDC where the courses are of a technical or vocational nature designed to furnish a person with skills for, or improve a person's skills in, an occupation. Obtaining a secondary school graduation diploma is not an eligibility requirement for an EAP to be paid from an RESP under the Act.
In William J. Troupe v Her Majesty the Queen (2002 DTC 1581) the Tax Court of Canada concluded for purposes of section 118.5 of the Act that the appellant's 12 year old daughter's enrolment at The School of Dance could reasonably be regarded as providing her with skills for, or improving her skills in, an occupation. In Michael Sandford v the Queen (98 UDTC 371) the court supported the appellant's view that the Edmonton School of Ballet provided his 12 year old daughter with a combined program of ballet and regular academic courses that furnish a person with skills for, or improve a person's skills in, an occupation. Where the vocational nature of the program at the educational institution provides a person with the skills for, or improves a person's skills in, an occupation, we would consider the program to be a qualifying educational program.
XXXXXXXXXX has been certified by HRSDC as a designated educational institution that provides courses which train the Individual for an occupation in XXXXXXXXXX; therefore, the program would be viewed as a qualifying educational program for RESP purposes, providing the workload, duration and other requirements are met. Accordingly, an EAP may be paid from the Individual's RESP under clause 146.1(2)(g.1)(i)(A) of the Act.
We trust these comments will be of assistance to you.
Yours truly,
Lita Krantz CPA, CA
for Director,
Deferred Income Plans, Section II
Financial Industries and Trust Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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