Horizon Europe lump-sum vs budget-based grants – significant changes in proposal preparation and project implementation
11th March 2026 at 10:27 am
About 50% of the Horizon Europe calls now require lump-sum or simplified-cost options, while the other half follow the traditional budget-based funding using actual costs. The choice is not a minor administrative detail. It directly influences the level of detail in Part A, how you write Part B, how you negotiate internally with partners and how financial risk is distributed once the project starts. Understanding the difference early saves time at submission and avoids costly misunderstandings during implementation.
The core difference: costs versus outputs
In a budget-based grant, the logic is straightforward: eligible costs are reimbursed according to the Grant Agreement. Costs must be recorded, justified and auditable. The proposal is therefore built around demonstrating that the requested resources are necessary and realistic. In a lump-sum grant, the logic shifts. Payment is not linked to declared costs but to accepted deliverables or milestones. The emphasis moves from “are these costs eligible?” to “was the agreed output delivered in line with the acceptance criteria?”. This single shift changes how you plan your work plan.
| Issue | Budget-based grants | Lump sum grants |
| How funding is calculated | Reimbursement of eligible actual or unit costs | Fixed payment(s) tied to deliverables and/or milestones |
| Evidence required | Timesheets, invoices, procurement records | Proof of delivery, acceptance reports, evidence of effort |
| Payment triggers | Cost declarations and interim payments | Acceptance of deliverables and/or milestone verification |
| Flexibility | Budget reallocation possible within GA rules | Less flexible; payment fixed unless scope changes |
| Audit focus | Eligibility of costs and documentation | Delivery of outputs and correctness of cost-to-output mapping |
| Financial risk | Shared, subject to documentation risk | Consortium bears the cost overrun risk for fixed outputs |
Implications for Part A and Part B of your Horizon Europe proposal
In budget-based proposals, Part A requires detailed budget tables per beneficiary and per cost category: personnel, travel, subcontracting, equipment, purchase costs and indirect costs. These figures form the financial backbone of the project. Part B must then justify those numbers coherently. If you declare 36 person-months in WP2, the described tasks must clearly require that effort. If subcontracting is budgeted, its necessity must be evident in the technical description. Evaluators assess realism and consistency; auditors later verify eligibility and documentation. In short, the proposal must convincingly show that the requested costs are proportionate and aligned with the work plan.
In lump-sum proposals, detailed budget information is still required. Although you need to provide data for the same cost categories as in a budget-based proposal, the costs are now assigned to each work package and per beneficiary. The financial structure is therefore more complex. In lump-sum projects, payment is linked to the completion and acceptance of WPs. At the end of a reporting period, the EU contribution is paid only if the expected outputs have been delivered and accepted in line with the Grant Agreement. This directly affects Part B. Beyond explaining the allocation of resources, the proposal must clearly demonstrate how those resources lead to specific deliverables. For each deliverable connected to a lump-sum payment, objective and verifiable criteria should be defined. It must be clear which tasks produce the deliverable, how much effort is allocated and what constitutes successful completion. In lump-sum proposals, insufficiently defined deliverables or unclear performance indication create financial risk, as payment depends on their fulfilment.
Implications for your Horizon Europe project implementation and reporting
The distinction becomes even more tangible once the project starts.
- In budget-based projects, financial management revolves around cost documentation. Beneficiaries maintain accounting records, timesheets and supporting documents. Reporting focuses on declared costs, and audits examine eligibility and compliance with the Grant Agreement. Budget reallocations are possible within the agreed framework.
- In lump-sum projects, the administrative burden of cost reporting is reduced, but the focus shifts to output verification. The critical question becomes whether deliverables meet the agreed acceptance criteria. Evidence must demonstrate that the work was completed as described. At the same time, financial risk increases for beneficiaries: if actual costs exceed the agreed lump sum, the overrun cannot simply be recovered.
A trusted partner for your Horizon Europe proposal and project
At accelopment, we have supported numerous Horizon Europe projects across all research domains and funding instruments, including those funded through lump sum grants. Our team combines in-depth knowledge of EU funding rules with hands-on experience in proposal preparation, budgeting, and project implementation. We assist applicants in navigating the specific requirements of lump sum funding, from structuring work packages to aligning with evaluation criteria. With more than 25 years of experience in proposal and project management, we can support you throughout your application process and then during the project implementation. Please have a look at a selection of our successful projects.
Andreia Cruz
Research & Innovation Project Manager
Dr. Johannes Ripperger
Research & Innovation Manager