Tuesday, 3 December 2013

Horizon 2020: Confusion about bonuses

A year ago, at the suggestion of the EC, the Council of Ministers introduced a clause in the H2020 legislation to allow additional remuneration (bonuses) of up to €8000 per year to be reimbursed as part of personnel costs if this was the normal practice of an organisation. This was in response to pressure from the newer Member States, where very large bonuses are paid to those winning competitively awarded grants, partly to compensate for very low levels of pay in their public sector organisations such as universities.

However, the €8000 limit is a long way below the bonuses paid in these countries. These can in fact be 200% and more of normal salary. For the €8000 to be useful, the personnel cost of a researcher would need to be €4000 per year or less! So the new Member States are confused by the EC’s suggestion, which seems to be based on inadequate knowledge of remuneration practices in these countries. If bonuses are limited to the €8000, participation in H2020 will be significantly less attractive than other funding sources.

Meantime, some west European universities are wondering if they should pay the €8000 bonus to their staff working on EU projects. However, this is not consistent with the legislation, which allows the bonus only if it is provided independent of the source of funding, for example for all non-national funding sources.

Bonuses are in fact allowable under FP7, whose Financial Guidelines detail the relevant conditions. Universities in the newer Member States are paying their staff bonuses and claiming the orresponding costs under FP7 projects. EC auditors have checked and accepted that these costs are eligible under the grant agreement. In recent briefings, EC lawyers say that bonuses eligible in FP7 will continue to be eligible in H2020.

Two mysteries remain. Why did the new Member States raise this question, when it was already well addressed in FP7? And why did the EC propose a solution which would not solve the (non-existent) problem – or are they in fact trying to limit all bonuses?

Singleimage - FP7 and H2020 Training Workshops and Advice