It’s July 2024 when unrest and confusion break out at the Institute of Psychology: a portion of academics’ personal research funds has suddenly been frozen. The funds in question are the so-called ‘earned funds’: ancillary income accrued by university researchers through activities such as giving lectures, providing courses, or writing a book. Sometimes these activities are carried out during working hours, but much more often, they are done in researchers’ own time.
Staff members can choose to have this money paid into their personal bank account, but then they pay over 50 per cent tax on it. Alternatively, they can deposit the money into the earned funds account at the university, in which case the whole amount stays available. Up until 2020, researchers did have to pay around 15 per cent to the university. They are free to spend the money as they see fit – for example, to hire student assistants, fund research not covered by grants, top up existing grants, or even organise team outings.
When the Institute of Psychology unexpectedly ran into financial difficulties last summer, due to a budget gap of 1.2 million euros, the earned funds were frozen overnight. Staff members could no longer access them.
Now, nine months later, researchers are still not sure whether – or when – they will get this money back.
This led to confusion, says Professor of Cognitive Psychology Mariska Kret. ‘I had saved up 25,000 euros by giving lectures and workshops on weekends and in the evenings. I also taught courses at the biology institute. And there was money from another university in the account as well, meant for a collaborative project.
‘I had plans for that. I have a large lab. I had set up a research project with dogs and eye-tracking, for example. There was no funding for it, so I paid for it using those earned funds. That project has been at a standstill for months now. How this situation has unfolded is incredibly demotivating. I’d planned to extend a PhD candidate’s contract using this money, but that couldn't go ahead.’
‘It’s led to a great deal of frustration among staff,’ says associate professor Michiel van Elk, who himself has seen his 8,000 euros in earned funds frozen. ‘I would use that money to appoint a PhD candidate or postdoc, for example. A grant alone is often not enough for that. It’s now more difficult to arrange the matching, our own financial contribution in grant applications. I don’t contest that the university is legally within its rights to do this. The consequence is that we can now no longer access our money, but the way this was communicated was far from transparent. That’s why it came as an unpleasant surprise.’
NOT COMMUNICATED
Kret had no idea that the funds officially belong to the university. Kret: ‘That was never communicated. I was also not aware beforehand that 15 per cent overhead would be deducted. I only found out when I checked my budgets. I was never told that they could do this. That they couldn’t touch grants but they can freeze earned funds. Many people now just have the money paid into their personal bank accounts. But I think that’s a shame; I want to use it for research.’
Following the unrest, the Institute Board sent out an email explaining how the earned funds are accounted for in the budget. Drop-in meetings were organised as well. The email states: ‘First of all, there has never been clear communication with individual staff members about how the university handles these funds. […]
When staff generate additional income, this is deposited into an earned funds account. If by the end of the calendar year these funds have not been spent, the amount is considered a budget surplus and is added to the institute’s general reserves. […]. By freezing the earned funds accrued before 1 July, they remain part of our reserves, thus preventing our financial situation from deteriorating and avoiding (further) budget cuts.’
Nine months have passed since, and there has barely been any communication, say the researchers, and the uncertainty continues.
The Faculty Council has now sent a letter to the Faculty Board. ‘We wrote that we will not agree to the budget for the upcoming academic year until there is more clarity on what will happen with those earned funds,’ says Council member and associate professor in psychology Gert-Jan Lelieveld
‘We’re asking for clarity on the duration of the freeze, and we propose that a portion of the money be made available, possibly subject to a certain threshold. Psychology is really getting thrown under the bus here, as the international bachelor’s programme is also likely to be discontinued: the least they can do is return those earned funds.’
When asked, the Institute Board states that the decision to freeze the budgets was made by the Faculty Board. Director of Operations Egon Houben and Head of Finance of the Faculty of Social and Behavioural Sciences Rob van Amsterdam offer to clarify this over the phone.
550,000 EUROS
The total amount of earned funds is around 550,000 euros, contributed by 108 staff members, says Van Amsterdam. The exact amount is known for each staff member, so the same amount can be released once the funds are unfrozen.
But that will probably take a few more years, he continues. ‘As it stands, the money will remain frozen until at least 2029. The general reserve is a surplus used to balance the budget.’
But if that surplus is not replenished, the money will not be released either.
There is an exception policy for dire cases, says Houben. ‘If people are not in a position to easily top up their funds, and they find themselves in trouble, they can appeal to the Institute Board, which will assess on a case-by-case basis whether money can be released earlier.’
How is it possible that staff were not aware of this measure?
Houben: ‘In times of prosperity, no one raises questions about this. We don’t include the earned funds in the budget, but they are part of the institute’s general reserve.’
Van Amsterdam: ‘There is no faculty-wide policy in place yet. However, the regulation drawn up by the Institute of Psychology in 2019 does include the sentence: “Funds in an earned funds account are part of an institute’s finances.” But I fully understand that this can be unclear to staff who are not that well-versed in financial matters.’
Earned funds that were brought in after 1 July 2024 can still be used. Can the faculty guarantee that these funds won’t be frozen as well?
Van Amsterdam: ‘The aim is not to do that, but I don’t have a crystal ball. I can’t give any guarantees. If The Hague announces another round of budget cuts, we may have to slash the entire general reserve.’
So wouldn’t it be better for staff to have their money paid into their personal account?
Van Amsterdam: ‘That’s a risk.’
Houben: ‘It’s difficult to say in black-and-white terms during whose time the money is earned. We want to make sure that it’s clear upfront: what is your own time, and what is your employer’s time?
‘That’s why the Faculty Board is working on a faculty-wide policy on earned funds. This will be discussed with the Faculty Council before the summer.’
One day before the publication of this article, the Institute Board sends an email to the staff.
In it, they write: ‘As previously promised, we will continue to inform you regularly about the financial situation of the Institute of Psychology. Recently, our communication has mainly focused on the developments surrounding the IBP/WIB (the international bachelor’s programme in psychology that the university plans to scrap, and the Balanced Internationalisation Act, Ed.). Unfortunately, that meant that other matters, such as this update on the earned funds, have not been shared earlier, as intended.
‘Because there are still questions about this topic and because an article about it is very likely to be published in Mare on Thursday 22 May, we would like to inform you directly today through this message.
‘In the summer of 2024, we announced the freezing of the earned funds [...}. At the time, we could not yet say how long the measure would remain in effect. We understand that this uncertainty is frustrating and that colleagues have questions about this. Based on the multi-year budget 2025-2029, we unfortunately have to conclude that there will be no room to access the balance of the earned funds during this period [...]
‘We realise that this will come as a disappointment to some colleagues. Especially to those who had counted on these funds. At the same time, we want to emphasise that this decision was made with care, with the aim of preventing larger and more painful interventions in the future.’
The Board continues: ‘What remains unchanged is that new earnings acquired after 1 July 2024 are freely spendable. These fall outside the scope of this measure and are set aside to be protected from future freezes.’
However, that statement is incorrect, confirms Director of Operations Egon Houben when asked. ‘We will do our utmost to avoid drawing on these funds, but as Rob van Amsterdam has already pointed out, we cannot give any guarantees.’ So should the faculty’s financial situation deteriorate further, it is possible that an even larger portion of the general reserves will be used.
The letter concludes: ‘Finally, we acknowledge that the rules regarding earned funds and the possibility of freezing these funds in times of financial distress have not been clearly communicated in the past. We hold ourselves accountable for that. Together with the faculty, we are working on a document that clearly and transparently defines these rules to prevent any future misunderstandings.’