Type of Grant
Grants are the most commonly used type of funding in Pillar II.
Grants are characterised by:
- The project budget, budget categories, and cost types defined in the grant agreement between the project participants and the European Commission.
- The grant is disbursed based on actual incurred costs or as a “lump sum,” provided that the project is implemented as agreed.
Reimbursement Rates
Project participants can receive a certain percentage of their total eligible costs. This depends on the type of project and the type of participant.
The general rule is that the reimbursement rate for Research and Innovation Action (RIA) is 100% of the eligible costs. For Innovation Action (IA), the standard reimbursement rate is 100% for nonprofit entities (e.g., universities or NGOs), while for-profit entities (e.g., small and medium-sized enterprises) receive a reimbursement rate of 70%.
Income
In a project, it is important to maintain a balance between expenses and income in the budget. Income primarily includes:
- EU contributions (i.e., EU project funding).
- Income in the project e.g. from participation fees for conferences organised as part of the project.
- Other sources of funding, such as financial contributions from partners or own resources.
- In-kind contributions (e.g., time or own resources allocated to the project).
Income generated from the exploitation of project results during the project period should not be offset as income in the accounting. If for-profit organizations generate income within the project during the project period, it will be deducted by the EU. However, income generated after the project period does not need to be reported to the European Commission and will not be deducted.
Consortium Composition, Roles, and Responsibilities
In collaborative projects (typically Research and Innovation Actions (RIA) and Innovation Actions (IA)), one beneficiary must coordinate the project. The coordinator is also responsible for receiving the total pre-financing from the European Commission and distributing the agreed budget shares to the other beneficiaries in the consortium.
Each beneficiary can use the pre-financing they have received. During accounting, they indicate the amount used in the first period, which is then paid out after the accounting. Thus, the EU subsequently disburses funds based on actual costs.
A consortium agreement is established in advance, specifying the budget distribution and the formal decision-making processes to be applied.