Minister for Health James Reilly has directed the Health Service Executive not to proceed with cuts to personal assistant hours.
Minister Reilly told the HSE to instead achieve savings by cutting "administration, training and travel costs" and through "better cash management" by related agencies.
The cuts to personal assistant hours, and the other cuts totalling €130m, had been agreed jointly between the HSE and the Department of Health before they were announced.
In relation to home care packages and home help hours, Minister Reilly said the HSE would assess people's needs on an individual basis.
The climbdown on personal assistant cuts comes after a storm of protests and debate at Cabinet today.
A group of people with disabilities began protesting outside Government Buildings earlier following the announcement of the cuts.
They said the decision to reduce or withdraw personal assistant and home help services from people will prevent disabled and older people from living independently in their own homes.
Thalidomide survivor Leigh Gath said she receives 11 hours of personal assistance.
She said her assistance hours have already been cut and said her message to the Government is that they cannot introduce further cuts to people with disabilities.