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One more reason to open an RESP or RDSP

The Government of Alberta has taken an important step to ensure that individuals applying for affordable housing are no longer penalized for contributing to registered savings plans. Minister of Seniors and Housing Lori Sigurdson has announced the exemption of Registered Disability Savings Plans (RDSPs) and Registered Education Savings Plans (RESPs) from the $7,000 asset limit that determines eligibility for affordable housing programs.
This change is significant as some applicants have been turned away from social housing, even though they meet income eligibility requirements, due to savings plans that elevate assets above the $7,000 limit. The $7,000 asset limit can itself act as a barrier for individuals applying for affordable housing, forcing some to get rid of their assets to qualify. In addition, these limits can discourage saving among people earning low incomes, as it does not take much to reach the $7,000 ceiling. For example, if a household has opened an RESP for two children and has also claimed the Canada Learning Bond, the RESP can be worth $4000 without any contribution from the household. Ultimately, the government’s decision to exempt RESPs and RDSPs reduces the chances that the $7,000 limit will prevent individuals with assets from accessing this support, and also removes barriers to saving.
Savings plans like RESPs and RDSPs are important asset-building tools that can help Albertans living on low incomes to plan for the future and achieve long-term financial stability. Education savings accounts like the RESP are especially important. In fact, studies show that children of low-to-moderate income families with up to $500 saved for college are 3 times more likely to enroll and 4 times more likely to graduate from college than those with no savings. As a result of the changes that exempt RESPs from social housing eligibility limits, families previously forced to return the CLB to access housing support can now reapply for the Bond and receive all money they were forced to return.
Social assistance and affordable housing programs that provide vital support while also encouraging low-income earners to save can better help Alberta families move out of poverty, for good. The exemption of RESPs and RDSPs from social housing eligibility rules represents a step in this direction.
Want to know more? Read the Government of Alberta press release.