Ok, so my parents have a RESP account for me with about $20000 in it, however my mom messed up the date to deposit the money a few years ago, so only $1500 of it is government money. My family is low income, with an annual income of about $30000, I used the OSAP calculator for an estimate of the amount of money I would get. The first time I entered my RESP as $20000 and I got $0:cheers: . The second time I did not put the RESP and I got around $13000, and I only need to pay back $7500.
<br>So here's the thing, if I tell my parents to take out all the money from the RESP account now, and save that money into their bank accounts. I would lose the $1500, but then I would get around $5500 of free money from OSAP, plus I'm also applying for the Queen Elizabeth II scholarship, and I think it would increase the amount of money I get from that too. But I am hesitant to do so because I'm afraid that OSAP may find out that I had 20k of RESP before and therefore offer me $0, and I would end up losing $1500, also I am worried that I may not actually get the amount of grant estimated. My question is, should I take out the RESP and apply for OSAP in order to get the $5500 grant, or should I not risk it and just apply next year after I spent all that money?
<br>And another question: When is a good time to start applying to OSAP?
What you're doing kind of sounds like it could be some sort of fraud, but I could be wrong...
I would take the RESP money over a loan any day, even if you do get a bit of free money from OSAP. Besides, use the RESP now, which will last about 2 years, and then for the next 2 years presumably you'll get a similar amount of OSAP loans and grants. You reduce your debt load.
Are your parents able to draw down from the RESP? My guess is yes, but they'll be taxed on whatever they draw down. Given that they're in a low tax bracket, they won't lose much, but still... $3-4k will probably get eaten away by taxes. Nevertheless, with a low family income, you will definitely qualify for max OSAP and will get a lot of money in grants (more money than you'd lose to taxes).
If you have the RESP in your name and don't report it to OSAP/NSLSC, then that's fraud. You don't need to report RESPs that you have previously had to OSAP, nor do you need to report any money that is informally being given to you by loved ones (i.e. that $16-17,000 of money that is yours but is sitting in your parent's bank accounts). What you'd be doing is taking advantage of a legal loophole.
You should apply for OSAP no later than mid June. Applying any earlier is not advantageous.