Lump-Sum Grants in Horizon Europe: Complete Guide to Simplified EU Funding [2026]

A lump-sum grant pays a fixed, pre-agreed amount for completing defined work packages, rather than reimbursing the costs you actually spent. Once the European Commission accepts that a work package is complete, the corresponding payment is released. It does not matter whether you spent more or less than the agreed sum.

The European Commission has been piloting lump-sum funding in Horizon Europe since 2021. With the 2026-2027 work programme, the approach reaches scale: the Commission has stated its intention to allocate 50% of Horizon Europe's budget through lump-sum grants, with a particular focus on actions where individual grants fall below EUR 10 million. Understanding how this model works is now a prerequisite for preparing a competitive proposal.

Why the Commission Is Expanding Lump Sums

The traditional actual-cost model in Horizon Europe has long been criticised for its administrative burden. Beneficiaries must track every euro of expenditure, collect timesheets and invoices, reconcile financial statements, and undergo CFS (Certificate on Financial Statements) audits. For many research organisations and SMEs, especially those without dedicated grant management teams, this overhead absorbs significant resources that could otherwise go into the research itself.

Lump-sum funding is the Commission's most direct answer to that problem. Authorised under Article 125(1) of the EU Financial Regulation and enabled for Horizon Europe through a Commission Decision on lump-sum contributions (C(2021) 1602), the model removes cost reporting entirely and replaces it with output-based payment. The Commission has also cited the goal of widening access to Horizon Europe for newcomers, particularly organisations in lower-participation countries and smaller companies that struggle with the compliance requirements of actual-cost grants.

How Lump-Sum Grants Work: Step by Step

1. Budget planning in the proposal

Depending on the call type, you either receive a pre-fixed total amount (Type 1, top-down) or estimate your own total (Type 2, bottom-up). In both cases, you complete a detailed Excel budget table breaking down estimated costs by category, beneficiary, and work package. This breakdown does not appear in the Grant Agreement as a binding cost breakdown; instead, evaluators use it to assess whether the requested amount is reasonable and proportionate to the work described.

2. Lump sums fixed at Grant Agreement signature

After evaluation, the granting authority negotiates and fixes a lump-sum share per beneficiary per work package. These figures are written into the Grant Agreement and do not change unless a formal amendment is agreed. From that point forward, payment is determined entirely by whether work packages are completed, not by what you spend.

3. Implementation and reporting

During the project, you implement activities as described in the Annex 1 of the Grant Agreement (the Description of Action). Progress reports are submitted as in any Horizon Europe project, covering technical progress, deliverables, and milestones. There is no financial reporting section listing costs; the financial statement is generated automatically based on which work packages you declare as complete.

4. Payment upon work package completion

Payment is triggered by declaring a work package as completed in the reporting period. Under Articles 22.3.3 and 22.3.4 of the standard Horizon Europe Grant Agreement, only fully completed work packages generate payment. One important exception applies at the final reporting period: the Commission may accept partial completion on a case-by-case basis, releasing a pro-rata share of the work package's lump sum.

Lump-Sum vs Actual Costs: Full Comparison

Which Calls Use Lump-Sum Funding in 2026-2027?

The Commission does not publish a single master list of all lump-sum calls in advance; the funding model for each call is specified in the individual call topic text and the associated Model Grant Agreement. However, based on the 2026-2027 work programmes published in late 2025 and early 2026, the following instruments and call types are confirmed or expected to use lump-sum grants:

The EUR 10 million threshold is a practical guide, not a hard legal cap. The Commission applies lump sums most readily where the total grant value is modest enough that the fixed-sum risk for the beneficiary is manageable. Larger collaborative projects, missions, and infrastructure grants are more likely to remain on actual-cost models, though exceptions exist. Always check the specific call conditions and the Annotated Grant Agreement published on the Funding and Tenders Portal.

Pros and Cons for Applicants

Budget Planning for Lump-Sum Proposals

Budget preparation for a lump-sum proposal demands a different discipline than for an actual-cost proposal. The goal is not to document what you have spent in the past, but to forecast what you will realistically need to complete each work package. Evaluators will not audit your historical costs; they will judge whether your estimates are proportionate to the activities described.

The budget table

The proposal budget table in lump-sum calls requires a breakdown by cost category (personnel, subcontracting, equipment, other direct costs, indirect costs), by beneficiary, and by work package. This table is used only for evaluation and negotiation; it does not become a binding ceiling on individual cost lines within the Grant Agreement. The binding amounts in the Grant Agreement are the lump-sum shares per work package.

Top-down vs bottom-up calls

In Type 1 (top-down) calls, such as many EIC Pathfinder Challenges, the granting authority sets the total funding envelope. Applicants propose a split across work packages and justify why the available budget is sufficient. The strategic question is whether the proposed scope fits within the fixed budget.

In Type 2 (bottom-up) calls, applicants determine the total themselves. The risk is over-requesting: budgets above the 80th percentile of comparable proposals in previous calls attract scrutiny and may require detailed justification. Under-requesting is equally dangerous because the fixed sum leaves no room for mid-project correction.

Work package scoping

Because payment depends on completing entire work packages, the way you scope work packages has direct financial consequences. Best practices from experienced applicants include:

• Keep work packages focused on a single coherent output that can be objectively declared complete.
• Avoid bundling activities with very different risk profiles into the same work package.
• Sequence work packages so that early, lower-risk deliverables generate early payments, improving cash flow.
• Define completion criteria explicitly in the Description of Action to avoid disputes with the Commission during reporting.

Reporting and Controls in Lump-Sum Projects

The controls framework for lump-sum grants is identical to actual-cost grants in all technical and non-financial dimensions. The European Commission, OLAF, the European Court of Auditors, and EPPO retain full investigative authority over lump-sum projects. What is removed is only the financial cost audit layer.

In practice, this means:

• Periodic progress reports are required on the same schedule as actual-cost projects (typically every 18 months).
• Technical reviews by external experts may be triggered at any point.
• On-the-spot checks can be conducted by Commission officials to verify that activities were genuinely carried out.
• Fraud investigations remain fully applicable. Falsely declaring a work package as complete constitutes fraud under the same rules as misreporting actual costs.

The guidance from the UK Research Office (UKRO) and the Austrian Research Promotion Agency (FFG) both confirm that beneficiaries should maintain internal records sufficient to demonstrate genuine implementation, even though these records are not submitted to the Commission as part of normal reporting.

Practical Implications for Your Project

For organisations new to Horizon Europe

Lump-sum calls are a meaningful opportunity. The absence of CFS audits, timesheets, and cost tracking reduces the compliance overhead that has historically made Horizon Europe unattractive for organisations without dedicated EU grant offices. If your first Horizon Europe application is to a lump-sum call, you can focus your preparation on writing a strong Description of Action and a credible work package structure rather than setting up an accounting system compliant with the Horizon Europe cost methodology.

For experienced Horizon Europe applicants

The main adjustment is in proposal strategy and project management. The actual-cost safety net, where you can adjust spending during implementation and still be reimbursed for eligible costs, is gone. Careful upfront cost estimation becomes more valuable than during implementation flexibility. Project managers need to monitor technical progress against work package completion criteria, not against cost budgets.

For consortium coordinators

Lump-sum amounts per partner per work package are fixed in the Grant Agreement and flow through the standard consortium payment mechanism. The coordinator is responsible for managing the overall project implementation and reporting, including declaring which work packages are complete. Internal consortium agreements should reflect the lump-sum structure, particularly the conditions under which partners receive their share when a work package is declared complete.

Finding the Right Lump-Sum Call for Your Project

With the 2026-2027 work programme distributing hundreds of calls across dozens of topic areas, identifying which opportunities fit your project, and whether they use lump-sum or actual-cost models, requires a systematic approach. The EU Funding and Tenders Portal allows filtering by programme and action type, but navigating the full scope of the work programme takes time.

GrantsFinder uses AI-powered similarity search across the full database of EU funding opportunities, including Horizon Europe 2026-2027 calls, to match your project with the most relevant open calls. Describe your project and research focus, and the tool returns ranked results with relevance scoring, including information on the funding model and key eligibility conditions.

Frequently Asked Questions

Further Reading and Official Sources

The primary reference documents for lump-sum grants in Horizon Europe are all publicly available:

• EC Guidance document “Lump Sum Funding: What do I need to know?” (updated guidance, available on the Funding and Tenders Portal under Horizon Europe / Lump Sum)
• Annotated Model Grant Agreement (MGA), particularly Articles 22.3.3-22.3.4 on lump-sum payment conditions
• Commission Decision C(2021) 1602 authorising the use of lump-sum contributions in Horizon Europe
• Regulation (EU) 2021/695 (the Horizon Europe Regulation), Article 125 on simplification measures
• Horizon Europe NCP Portal lump-sum section at horizoneuropencpportal.eu for national contact point guidance by country

For guidance on writing the technical sections of your proposal once you have confirmed the funding model, see our guide on how to write a Horizon Europe proposal and the complete guide to the Horizon Europe 2026-2027 work programme.