Minister of State at the Department of the Environment Paudie Coffey has said the water conservation grant will be administered by the Department of Social Protection from existing structures.
Any additional resources will be provided for a relatively cheap cost.
The grant will be given to households who register with the department when water charges come into effect next year.
Speaking on RTÉ's Morning Ireland, Mr Coffey said there would be some additional operational, logistical and IT resources needed to administer the grant, but it would be done for a relatively cheap cost.
However, Mr Coffey did not give an exact cost.
He said the €130m conservation grant was not part of the Irish Water expenditure funding model.
Mr Coffey accused the Opposition of trying to stitch the figure into the funding model to try to create obstruction and confusion.
He was responding to questions raised by Fianna Fáil Environment spokesperson Barry Cowen about the costs associated with the grant.
Mr Cowen said he was concerned that the Government had only provided for €130m to be allocated to cover the grant.
He said the Department of Social Protection should inform the public about the costs associated with the grant.
Mr Cowen reiterated his call for the Comptroller and Auditor General to be called in to carry out a detailed analysis of the finances around Irish Water.
"It needs to be put into the mix in relation to the EU market test that will take place next March," he said.
Minister for the Environment Alan Kelly this morning said he is confident that new legislation responsible for Irish Water’s operations will get the support of both the Dáil and the Seanad this week despite the controversy over the allocation of funding.
Speaking in Portlaoise this morning, Mr Kelly said he rejected suggestions that he had created any confusion over the charges.
Mr Kelly said: "I think it's very important that the new package, which I think is a modest package, a reasonable package, addresses all the issues, and makes sure that everyone is absolutely fully aware that water will never be privatised."
