TALKS on a new Croke Park deal have hit a major stumbling block after the Government put forward plans to hit public servants earning over €60,000 a year with a pay cut.
Sources said unions and government officials were locked in a battle over which public servants were highly paid, and who would therefore face a wage reduction.
Unions want the threshold for cuts to be as high as possible, but the higher the Government goes, the more it will reduce potential savings.
Sources revealed that the Government wants unions to agree a threshold for a wage reduction of between €60,000 and €70,000 a year.
A final figure has not been agreed, but sources said a €65,000 threshold was now being discussed.
The Government aims to raise the biggest slice of its €1bn target for payroll savings over three years by reducing high earners' wages, together with plans to make staff work an extra hour a day.
The two measures are expected to deliver €350m of the €1bn savings.
However, sources estimate that the 'higher pay' reduction could raise up to €250m of this.
They said unions were edgy about the proposal as even a €65,000-a-year threshold would bring thousands of staff into the net.
This would include workers in local authorities, health, education and the Oireachtas, including school principals, the judiciary, cabinet ministers, staff in higher health grades and senior civil servants.
Those who are on the incremental scale may be asked to take a 'step back' by going back to the pay level they were on the year before.
Those who do not get increments because they are at the top of their pay scales or are on a single-point pay scale are likely to face a pay cut of between 5pc and 7.5pc. This includes the most senior officials in government departments.
It has also been proposed that lower-paid staff would face an increment freeze.
Figures supplied by the Department of Public Expenditure and Reform show that 28,769 of the country's 292,000 public servants earn over €70,000 a year.
However, if those earning between €60,000 to €70,000 are included, it adds another 23,182 public servants to the equation.
Sources said the threshold had become a big issue not only between the central negotiators and state officials, but for unions who do not have a seat at the central talks.
"At the moment, all the unions who are not at the central negotiating table are dealing with cuts in substitution pay, premium pay and other payments, but are asking 'what's the story on our core pay?'" said a source.
"The higher paid have already taken a big hit, and unions are suspicious because they don't have the total picture and feel they are being asked to buy a pig in a poke."
The talks have already faced obstacles over other big ticket savings, including cuts to premium pay, which led to garda bodies pulling out of talks and other unions threatening likewise.
This was followed by a government attempt to get all public servants to work an extra hour a day.
However, it may be forced to compromise after IMPACT warned it would not recommend a deal that means five extra hours a week.
Meanwhile, IMPACT has told its 63,500 members that the talks are in the "last lap".
It said even if a package emerged from the talks it would have to "pass the test" by getting members' backing in ballots.