Taoiseach Enda Kenny has told the Croke Park Implementation Body that it can only meet its 2013 spending targets if it secures significant cuts in payroll costs next year.
Mr Kenny voiced the need to increase pressure to secure savings from the agreement at a meeting this afternoon.
He told the body that while the Government remains committed to the agreement, it is facing extraordinarily difficult choices.
Mr Kenny said delays in reforms were not acceptable, and the issues around allowances must be brought to a swift conclusion.
He said negotiations with hospital consultants was an example of what could be achieved and the same principle had to be applied across the public sector.
Radical reforms in the local government sector will be brought to Government shortly.
It is understood that no financial target will be available until after further engagement at sectoral level.
Earlier today, Minister for Public Expenditure and Reform Brendan Howlin said there had been no change in his approach to allowances for serving public service employees.
Mr Howlin said that he indicated on 18 September that one category amounting to 88 allowances would be looked at with a view to eliminating them under the Croke Park Agreement.
The minister said he had written to all the sectoral managers to do just that.
Mr Howlin added that whether or not these allowances could be eliminated would be a matter for the sectoral committees through engagement with unions under the agreed Croke Park processes.
Fianna Fáil's Willie O'Dea told the Dáil that there is confusion over public sector allowances and asked Tánaiste Eamon Gilmore if it was a genuine effort or a window-dressing exercise.
Mr Gilmore said many of the allowances were agreed during the years when Fianna Fáil was in government.
SIPTU’s Patricia King said this morning that a move to cut public service allowances was an attack on low-paid workers.
Employers' group IBEC has called for increased working hours for public servants as a means of generating savings in the public sector pay bill, while maintaining frontline services.
It also called for the suspension of increments to public servants, saying it was not "credible" and did not make economic sense to award €1bn in pay rises to this group over the term of the agreement.