Irish Water staff will receive bonuses of up to 10pc of their salary depending on the quality of their work, the Dail's Public Accounts Committee (PAC) Was told.
Irish Water's decision to pay bonuses was based on its decision to adopt the payroll model of its parent company Bord Gais, its managing director John Tierney has said.
Last night, the committee heard that in Bord Gais, average bonus payments worth €7,000 have been paid out to its 300 staff.
Mr Tierney said the decision to pay bonuses was done having notified the Department of Communications, Energy and Natural Resources and that approval was granted for Irish Water to follow Bord Gais' example.
It is understood that the bonuses are not assured as they are performance based.
And Secretary General at the Department of the Enviromnet, Geraldine Tallon, has admitted she did not know how much had been spent on controversial consultancy fees in setting up the €180m Irish Water for nine months of last year.
It was also confirmed that Minister Phil Hogan was never told of the amount of money that was budgeted for consultancy.
Asked by Sinn Fein's Mary Lou McDonald, Ms Tallon said it was not the case that Mr Hogan knew nothing.
"It's not reasonable to say our minister knew nothing. He knew the broad figure in December 2012."
When pressed by Ms McDonald, Ms Tallon said she did not mention the €50m to her Mr Hogan. "I didn't speak to the minister in specific terms about that figure. He knew the majority of the spending was to do with the set up costs," she told the committee.
Ms Tallon said that Mr Hogan's expression of surprise at the €50m spend on consultants last year may have been as a result of his busy schedule around Ireland's Presidency of the EU last year.
Under-fire Environment Minister Phil Hogan kicked to touch saying bonuses and pay was an issue for Public Spending Minister Brendan Howlin.
But Social Protection Minister Joan Burton and Junior Finance Minister Brian Hayes indicated the Government will move to block the payment of bonuses to all 500 staff at Irish Water.
Mr Hogan also rejected claims that he should have personally checked how the €180m worth of Irish Water funding was being spent.
Taoiseach Enda Kenny said Mr Hogan will not be asked to resign over the Irish Water controversy following revelations of the €86m expenditure on consultants.