Queen’s Park is ordering Ontario Children’s Aid Societies to set up registered education savings plans for all kids in foster care under age six receiving Ottawa’s $100-a-month child care benefit.
An annual contribution of $1,200 from birth to age six would trigger $340 a year in matching federal funds and $1,000 in Canada Learning Bond payments up to age six. After that, the RESP would grow by $100 per year in Canada Learning Bond payments, until age 16, according to the Royal Bank, which was chosen by the province to manage the RESPs at no charge to the societies.
Assuming an annual investment return of 5.6 per cent, the RESP could be worth nearly $23,000 by the time the child turns 18.
It adds up to a crucial contribution to the future education of these vulnerable kids, say child welfare advocates who have been pushing the province to ensure children in foster care have access to federal education benefits that grow tax-free.
“Now kids in care will get the same chance to save for their education as other children,” said social policy expert John Stapleton. “And they will have access to federal matching funds.”
