A private member's bill that would make contributions to a registered education savings plan tax-deductible would benefit all income groups, say experts.

Here is how it would work:

Currently, parents can put up to $50,000 of income they have paid tax on into an RESP for their child's post-secondary education. The money in the fund earns interest, tax-free, until the child attends a college or university.

When the child attends college they can then withdraw the money to pay for approved expenses and only the interest earned would be taxable.

The Liberal private member's bill C-253, which has passed the Commons and is now in the Senate, would if passed work in a similar fashion to an RRSP by providing a tax shelter. Parents would be able to put $5,000 a year per child into a RESP as a deduction against taxable income.

$50G MAXIMUM

The maximum amount a parent could deposit in an account in total would remain $50,000, and they could deposit it all in one year, but only $5,000 would be a tax deduction. Because the principal was never taxed both the interest and the principal would be taxable when withdrawn.

It is a proposal, says Cleo Hamel, senior tax analyst with H&R Block, that would benefit every income group with children.

* A single parent family with one child and an income of $40,000 would save $523 in taxes if they put $3,000 into a RESP.

* A two-income family with two children, where one parent earns $25,000 and the other earns $55,000, would save $11,000 in tax if they put $2,500 per child into an RESP.

* A one-income family with two parents and two children where the earner makes $80,000 would save $2,424 if they put $5,000 per child into an RESP.

"We talk about the government wanting to have tax measures that would affect the broadest range of Canadian taxpayers," says Hamel, "in this case ... it doesn't matter how much you can put aside ... you will see savings."