Question for INVESTING & its EFFECT On OSAP

[mathiewannabe]

EDIT!!!!
MY MONEY IS IN TFSA(Tax free savings Account)

# Invest up to $5,000 each year and every year.
# Accumulate faster by never paying tax on your investment income, interest, dividends and capital gains.
# Withdraw funds any time and for any purpose without paying any taxes.
# All income earned -- dividends, interest, capital gains – grows tax free.



Does this mean I can put in $5000, and if we take extreme case, and say it grows to $20000 in 1 year, so $15,000 will NOT be taxed????


Or does it mean that for the same situation, that $5000 will NOT be taxed, and the rest($10,000) will be taxed???



WILL ANY INCOME EARNED IN THIS ACCOUNT AFFECT MY OSAP GRANTS?????

Will they view it as like income earned from regular part-time job???

I"m also going to ask people from TFSA.

[CSK'sMom]

A TFSA is considered an asset and must be reported at it's full value to OSAP, just like an RRSP. Will if affect your funding, quite possibly as you are expected to contribute to your education costs. Any gains inside a TFSA are not taxed.

[mathiewannabe]

hm... do you know the maximum I can earn yearly without affecting the grant?

Oh also, if say, money goes from $5,000 to $15,000, in 1 year.

So that is $10,000 in gain.

Should that be reported as income? Because you said it's only an asset. If that's the case, I might consider moving my account under my mom's name.

[CSK'sMom]

What "grant" are you talking about? OSAP is a loan. When asked about your assets on the OSAP application you'll have to report the full value of the account. If you put $5k in and it's now worth $10k you have to report it at $10k. Income is a seperate section on the application and has nothing to do with assets but both are used in caluculating any funding that you're eligible for.

[mathiewannabe]

so first, money generated from TFSA, is not an income, but rather an asset?

Second, for grants, I got canada access grant and ontario access grant in my 1st year.

Aren't they giving that to me in 2nd year also? Or are grants primarily for 1st year??

I was assuming grants apply also in subsequent years because I've heard that making over $50/week from part-time jobs will affect "grant" amount.

[sexpuppet6000]

The way I understand is if you have money, OSAP won't give you any. Therefore, if you have assets it is likely that OSAP won't give you [or what give you as much] than if you had zilch. So... when you apply for OSAP, convert your assets [if possible] into physical cash so that OSAP will think you are broke.

[mathiewannabe]

So should I consider making a TFSA under my mom's name?

But what i'm concerned with is, if i make some sort of money from TFSA, will it increase her net income? or will it just be considered asset.

Because I strongly would like her to have current income because it'll be advantageous for me for bursary/grants.

[CSK'sMom]

The Ontario Access Grant is for 1st and 2nd year and it's based on your parents income. The Canada Access grant is gone and has been replaced this year, again it's based on your parents income. There are many changes this year to student aid. Working partime will not have any real impact on funding either.

You can absolutely have assets and get OSAP, heck both our boys have RRSP's and get full funding. The amount is what OSAP is concerned with. If you can afford, as a student, to put $5k in a TFSA you probably don't need OSAP. Again, you are expected to contribute. As for putting the account in your Mom's name.. well that will screw here in the end as she won't be able to take advantage of a TFSA. ANd let's get realistic, there is no way without extreme risk are you going to get that kind of return on investment.

[mathiewannabe]

Oh thanks! I read somewhere that earning over $50/week will affect grant amount.

Well, I only put in 3k, and that's entirely from my savings...

for the return on investment, i'm investing in stocks for TFSA myself so i guess that is an extreme risk.

It's good to know that Grants are only based on my parents' income.

I don't think neither my mom nor my father will mind me using their name for TFSA because they contribute enough to their RRSP.
So putting TFSA in her name won't affect anything at all?! ha, I love TFSA!

[CSK'sMom]

Read up on the changes to student funding on the OSAP or canlearn sites. Having $3k in your name could very well make an impact on your loans. If your parents are maxing out their RRSP's then they really need the room in TSFA's, so yes you would be screwing them. That is if they would even consent to such an arrangement...

[mathiewannabe]

but $3000 isnt that alot of money to have in savings!
I'll look into canlearn sites also. Thanks for all the help!! I guess its nothing big to worry about unless my portfolio grows a bit more!

[CSK'sMom]

For student who is expected to contribute to their education, yes it is. You can't have it both ways. OSAP is need based so that those who truely need the help with their costs get it. This is exactly why it's income based and not everyone qualifies.

[napalmfrog]

I don't think there is a specific 'asset' amount that will magically change your loan amount, it depends on your status/income/parents and what not. I am considered an independent (as in, my parents info doesn't show up anywhere on my form because I am 5 years out of high school) and put down my full assets of $7000, and I still received the maximum amount of loans possible.

However, my sister last year put down $4000, and lost $2000 in loans compared to the year before, and she still needs to put down my parents info.