Allowances for public sector staff targeted to save €375m
A vast array of over 800 allowances paid to public sector workers on top of their basic pay and costing €1.5bn are set to become the battleground for Budget 2013.
The Government has to slice another €375m off the €15bn public sector wage bill next year.
The focus on allowances comes as Tanaiste Eamon Gilmore dug in on ruling out compulsory redundancies being introduced as part of any future public sector deal, beyond the existing Croke Park Agreement.
The range of allowances is currently being reviewed and will result in some being maintained and some stopped.
"The next challenge is allowances," a source said.
Under the Croke Park deal, the Coalition can't cut core pay. The Government is looking at savings from allowances, overtime, sick leave and continuing to reduce numbers of staff.
Every department was asked to list the allowances paid in their sector and the case for keeping the payment.
Public Spending Minister Brendan Howlin is currently trawling through the various reviews and will come back to Government with a recommendation on what allowances will be kept and which will be scrapped.
Meanwhile, the rift in the Coalition over potentially bringing in compulsory redundancies continued to simmer.
After Transport Minister Leo Varadkar said the ability to sack workers would have to be included in a new deal, Mr Gilmore hit back.
"Compulsory redundancies are not on the agenda. Full stop," he said.
Taoiseach Enda Kenny was less strong on the issue, sticking to saying the issue of Croke Park II does not arise yet.
"The Croke Park Agreement is very clear. It does not envisage any compulsory redundancies," he said.
The current Croke Park Agreement runs out at the end of next year.