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Myths and Truth about the Additional Remuneration and National Project Reference Rate schemes

Part1

 

Whenever I’m giving Horizon 2020 financial courses at universities in the Central and Eastern European countries, I’m facing the same question: “Is it fair that in an international research project the participating researchers from Hungary, Czech Republic or Bulgaria earn 3 to 10 times less than their fellow researchers from the Netherlands or Norway?” Their rationale is that they do the same work in the same project; and still, they earn much less.

Maybe I will be considered rude by many readers, but I think that in Horizon 2020 that’s a fair treatment, actually the fairest of all options. Why? Since H2020 is based on cost reimbursement in 99% of the cases, the Beneficiaries can report their real employment costs to the programme. It is important to see that legally speaking it’s not the researcher(s), but the University (or any other legal entity) is participating in these projects. Therefore, for them – for these legal entities – the math way is as simple as: if my employment costs are 1,000 euros, that’s what I should report; if they are 10,000 euros, then that. You cannot have double standards: raising the salaries artificially whenever paid from EU money would be like travelling business class when your “uncle” pays for it, otherwise hitchhiking when it’s from your own pocket. I know it’s far more complicated, but at the end that’s true.

 

 

So, is this fair? Do we live in a fair world at all?

 

Nevertheless, the European Commission listened to and heard the complaints and arguments of these countries: there are two schemes that may allow the organisations participating in a Horizon 2020 project to pay more salary to their researchers just because they participate in a Horizon 2020 project. 

  1. The additional remuneration scheme: additional contracts for the project with extra money paid – meaning working the same number of hours as before the project, but more salary paid. Like bonus money only because of the project.
  2. The national project reference rate: paying as much money as one would be paid in national research schemes, but again, the same working hours as before the project.

 

 

Would that be so simple? Be careful, because it is not.

 

First, let’s have a look at the additional remuneration scheme. Most importantly, we must state in the very beginning that this is not a bonus for having a project. It is to pay extra salary while working the same number of hours as before the project; but these extra payments (the additional remuneration) must be based on having an extra responsibility and/or role – i.e. over one’s usual duties – within a Horizon 2020 project.

These extra payments can be considered eligible personnel costs only if all the following conditions are met:

  1. The Beneficiary is a non-profit entity (public or private)
  2. It is paid systematically – i.e. not based on ad-hoc decisions – for some additional role/responsibility within the project(s), like:
    • for doing research/task that the researcher does not do normally
    • for being WP/Task leader, team member, etc.
  3. It is eligible up to 8,000 euros per person per year, considering the FTE-rate, meaning:
    • One work in a full-time position and spends all his/her time on this particular H2020 project(s). the limit is 8,000 euros
    • One works in a 50% position at the Beneficiary but spends all of her/his time on the project: the limit is 4,000 euros (50% of 8,000)
    • One works in a full-time position, and works 3 months exclusively on the project in the given year: the limit is 2,000 euros (25% of 8,000)
  • The total additional remuneration costs (i.e. the total extra salary costs, not (just) the net payment) is eligible either up the amount paid or up to the limit set above - whichever is lower.

So, if one is paid 500 euros net each month that costs in total 800 euros to the employer by adding the taxes and charges; and spends 75% of his/her full-time position on a Horizon 2020 project over a year, then:

  • Total additional remuneration cost is: 12x800 = 9,600 euros
  • The limit of his/her additional remuneration cost is 75% of 8,000 = 6,000 euros
  • The eligible remuneration cost, therefore, is: 6,000 euros.

 

Please note that the limit is not always 8,000 euros, and not for everyone. It depends on your employment contract (full time or part-time) and your involvement level to the particular H2020 project. So, the limit will most probably differ from employee to employee.

Finally, do not forget: this it is to be calculated separately – i.e. not part of the hourly rate calculation for the basic salary.

 

Next week, we will come back with the details on the national reference rate calculations.

Stay tuned!

NB! Must be paid to all, not depending on the source of funding. This practically means that you must have a full policy that clearly declares based on which conditions you can pay out additional remuneration to any of your employees - if they meet the criteria (for doing additional work/tasks besides their normal duties). These criteria can be met in several ways, working in a Horizon 2020 project is just one of the possible examples. Check the Annotated Model Grant Agreement from page no 44 at least till page no 49 where it is stated that: “additional remuneration schemes that are applicable only to EU projects are not acceptable.”