What are allowances?Allowances are payments made to staff in the public service on top of basic salary. They cover areas ranging from dangerous or dirty jobs to compensation for working at night or weekends.

Many allowances are misnomers as they cover areas that are part of intrinsic core pay. School principals, for example, are paid a teaching salary and a principal’s allowance. In reality the total payment is for being a principal. Others are historic, with many awarded as industrial-relations deals when a pay rise could not be given.

Other allowances have generated hilarity, such as the underwear allowances for female members of the Defence Forces, the shoe allowances paid to members of staff who spend a lot of time on their feet and the eating-on-site allowances for staff who lunch on the road.

How many allowances are there?The Government estimates about 1,100 allowances are paid to staff in the Civil Service, health service, local authorities, the Garda and the Defence Forces. They cost about €1.5 billion a year.

What did the Government want to do?Minister for Public Expenditure and Reform Brendan Howlin announced last year that he would review allowances. He aimed to save €75 million this year and €150 million next year.

What has happened?Very little. The review ran months behind schedule and when Cabinet finally decided on the issue this week it opted effectively to leave well enough alone.

Only one allowance paid to serving personnel is to be abolished. This is a representational allowance of up to €218 per night for staff attending EU or international meetings. Plans are afoot to review other allowances in talks with unions next year.

So who will be affected?Only new entrants will be hit. The Government is to scrap 180 allowances for personnel taken on in the future. This will include qualification allowances for teachers and midwives, rent allowance for gardaí and the underwear allowance for new female Defence Forces personnel.

Surely that won't save much?Howlin has acknowledged that only €3.5 million will be saved this year. The Department of Public Expenditure and Reform is silent on whether the €150 million estimated in savings for next year will be achieved.

Minister for Transport Leo Varadkar said the Government feared the Croke Park agreement with public service unions would unravel if it went after allowances.

Howlin said the €75 million target for saving had not been included in the Government’s financial arithmetic for the year. In any event he has argued that the Government will achieve its overall savings on the State’s pay and pensions bill as staff leave.

What are the unions saying?The teaching unions have been critical of this further reduction for new entrants. The union representing higher civil servants said its members would be disproportionately affected by the cut to the representational allowance. However, the unions have been cautious; probably unsurprising, as their serving members have dodged the axe.