12 October 1994 External T.I. 9425055 - RESP PAYMENTS TO A STATUS INDIAN

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

5-942505 RESP payments to a status Indian

Position TAKEN:

Status Indian students are generally ineligible to receive educational assistance payments from an RESP.

Reasons FOR POSITION TAKEN:

The students are reimbursed for all educational expenses

XXXXXXXXXX 5-942505

Attention: XXXXXXXXXX

October 12, 1994

Dear Sirs:

Re: Registered Education Savings Plan (RESP)

This is in reply to your facsimile of September 26, 1994 wherein you requested our opinion as to whether or not Status Indians who receive remuneration from the Federal Government related to expenses incurred for their post-secondary education are excluded from receiving payments from an RESP pursuant to section 146.1 and subsection 118.6(1) of the Income Tax Act (the "Act").

Pursuant to paragraph 146.1(2)(g) of the Act an "educational assistance payment", as defined in subsection 146.1(1) of the Act, can be made from an RESP only if, at the time the payment is made, the beneficiary is in full-time attendance at a post-secondary educational institution and enrolled in a "qualifying educational program", as defined in subsection 118.6(1) of the Act, at the institution. If, as suggested in your letter, a student receives from an arm's length person any allowance, benefit, grant or reimbursement of expenses in respect of the program, the program is not a qualifying educational program and the student would be ineligible to receive educational assistance payments.

Although it would involve a finding of fact in a particular situation as to whether or not a Status Indian student would be eligible to receive RESP benefits, it is our opinion that Status Indian students would, generally, be ineligible to receive educational assistance payments.

We trust that the above comments will be of assistance to you.

We trust our comments will be of assistance to you.

Yours truly,

for Director
Financial Industries Division
Rulings Directorate