A:

Unfortunately the answer is not included in the Financial Guidelines or the model contract.
 
Let's deal with the questions in reverse order:
 
- No question about the salary and employee's benefits and employer's "normal" employee costs actually paid for the replacement, they are all allowable
- under FP6 the costs of hiring and termination are allowable, but the question is whether they are a direct or overhead cost. Again nothing clear from the Financial Guidelines, so we must rely on the contractor's normal accounting practice. If these costs are normally recorded by him as direct costs and not overheads they can be charged as such in the Cost Statements. If these costs are normally in the accounts of the contractor as overheads they must be charged through overheads (and effectively only FC model allows the amounts to be charged because FCF and AC are flat rates)
- With regard to maternity leave we again need to consider whether they are a direct or an overhead cost. If these costs are normally recorded by the contractor  as direct costs and not overheads they can be charged as such in the Cost Statements. If these costs are normally in the accounts of the contractor as overheads they must be charged through overheads (and effectively only FC model allows the amounts to be charged because FCF and AC are flat rates). BUT NOTE the further difficulties, especially if charged as direct costs:
1. there will be no time in these months on the project so zero hours time the cost equals zero! In our  view anomaly which can be ignored where 100% employment on the project, but where less than 100% probably applies.
2. maternity leave payments will not be all that frequent and although the employer may have budgeted the cost into his annual costs for staff, it is reasonable to assume that the average period between payments for staff (most countries male and/or female) will be more than the period of the project. On the other hand the employer would not have been allowed to charge the expense on a provisions basis unless paid to an outside party (which would be very unusual). So, our view is that the maternity payments for employees with  100% of their time on the project should be fully  allowed subject to  the member of staff (and their replacement for the limited period) is employed on the project for almost all the period of time of the project (3-5 years). If not, the amount needs to be proportionately reduced according to contractor's budgeting rules for this cost and the frequency of the payments on an average basis. This is a personal view and will need to be argued with the auditors and potential the project officer and/or the EU financial section.

We will discuss this question with the EU and update this information as soon as we get it.
 
Note: for AC contractors where permanent staff can not be charged in any case, the maternity leave will also not be allowable for those staff.