Minister for Defence Alan Shatter has said Defence Forces personnel are paid as well as any other army in Europe.
The minister was responding to criticism from the Defence Forces representative association PDFORRA, which said around 1,300 members are receiving supplementary social welfare payments.
PDFORRA, which represents soldiers, sailors and air force personnel, said around 20% of its members are on family income supplement because they cannot support their families on their current wages.
Addressing PDFORRA's annual conference in Wexford, Mr Shatter said he did not believe this affected morale.
Earlier, the association said Defence Forces personnel have taken cuts of up to 20% in their salaries.
Association President Mark Scally told the conference that it was nonsensical to first cut pay only to then hand the money back in the guise of social welfare.
The association also said the Defence Forces does not have sufficient personnel or resources to carry out its duties.
It pointed to the fact that three out of the eight naval service vessels are being repaired and out of service.
Mr Shatter also told delegates that the Defence Forces remains a key constituent of the State's security service and cited the work of the Bomb Disposal unit in dealing with improvised explosive devices.
He said there was provision this year for the upgrade and refurbishment of the unit's HOBO robots, which are used to make IEDs safe.