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NIH SALARY CAP REDUCTION - EFFECTIVE 12/23/2011

NIH has issued a notice (NOT-OD-12-035) about the new salary cap for FY2012 (10/1/11 – 9/30/12) funding increments. Check out the FAQ page on the NIH web site with any questions that you may have. 

All references to FY2012 below constitute the federal fiscal year.

NOTE: The initial issue date of the FY2012 increment of the grant award is the determinant of which federal fiscal year NIH salary cap is applicable. 

  • The implementation of the new lower salary cap ($179,700) is effective on FY 2012 awards where the initial issue date of the award is on/after 12/23/2011.  For FY2012 awards issued on/before December 22, 2011 (competing and non-competing), the effective salary cap remains at the Executive Level I ($199,700)

  • If a grant award was issued on/after December 23, 2011 and it is a non-competing award, then grantees may re-budget (provided there is no term or condition of the award prohibiting such) the funds awarded in excess of the new salary limit. However, if the grant is a competing award, the NIH will revise the award when an adjustment for the lower salary limit is needed.

  • Any grants awarded in previous fiscal years (e.g., FY 2011 funding increment, FY 2010 funding increment, etc.) are not impacted by the FY 2012 salary limitation.  Carrying over previous federal fiscal years’ funds to support salaries will remain at the salary limitation levels in effect at the time those awards were issued.

  • The salary limitation does NOT apply to payments made to consultants under an NIH grant or contract although, as with all costs, those payments must meet the test of reasonableness and be consistent with institutional policy.

  • The salary limitation provision DOES apply to subawards/subcontracts for substantive work under an NIH grant or contract.

As more information becomes available on this significant salary cap change it will be posted here for reference as soon as possible.
Should anyone have questions/concerns about this information, PLEASE contact the Office of Research and Sponsored Programs at 792-3838 or at orsp@musc.edu.