The income threshold for entitlement to the student grant will be reduced by 3% and will apply to new and existing students.

Minister for Education Ruairi Quinn said the measure would affect approximately 8% of the 80,000 students currently in receipt of a grant.

The Department of Education estimates that around 220 students will lose the grant entirely, while others will see their payments reduced.

Mr Quinn said CSO data showed that incomes had fallen by almost 8% in recent years and this 3% cut should be seen in that context.

On cuts to teacher allocation to fee-charging schools, Mr Quinn said the Department believed there was “significant capacity” in the fee-charging system.

He said the 55 post-primary schools in question charged fees ranging from €2,550 to €10,065 for day pupils and these schools had the resources to employ teachers privately.

Minister Quinn said the reduction in teacher allocation for fee-charging schools was not an effort to close down any schools of a particular ethos.

He said fee-charging schools could explore the option of moving into the free education system.

He said the Department had had “serious inquiries” from five fee-charging schools, both Catholic and Protestant, regarding this.

On the €25 million cut to funding for third level institutions, the minister said the institutions would be expected to manage the reduction through the use of existing cash reserves.