The HSE has published its Service Plan, outlining the need for cuts of over €1 billion next year.

However it has slashed its targets for savings from cutbacks to medical cards.

The agency now expects to save just €23 million from examining the cards currently issued - down from €113 million announced on budget day.

Minister Howlin insists that though the original €666 million figure for savings was presented as a service cut, much of those saving have already been achieved. Add to that changes in drugs costs and price listing and the Minister claims the savings are already 'done'. 

But the HSE's warning that it cannot stand over proposed payroll savings of €108 million, and that more funding could be needed.

It comes as the Minister for Public Expenditure and Reform Brendan Howlin has said he will fund a once-off, targeted redundancy scheme aimed at 5,000 administrators in the HSE.

Brendan Howlin told Newstalk's Pat Kenny show that the issue was discussed at Cabinet yesterday - and he will use money from the sale of State assets to pay for the scheme: