RESPs are split into income paid as Education Assistance Payments (EAPs) and your original contributions.

Education Assistance Payments (EAPs) are withdrawals from an RESP to help finance a beneficiary's post-secondary education. These payments are made once the beneficiary enrolls into a qualifying education program and it consists of government grants and income earned within the RESP.

A contribution is the money that a subscriber puts into the plan to save for a beneficiary's post-secondary education. These contributions are made with after-tax dollars, which means they’re not tax-deductible, but they grow tax-free while in the plan.

Tip: When it’s time to use your RESP, it’s best to withdraw the EAPs first. These payments include government grants and income earned in the plan—and if they’re not used for eligible education expenses, that grant money must be returned to the government.