The Government has been accused of fobbing off service personnel concerns about pay and conditions with compliments and platitudes.
Dara Calleary claimed the "crisis" had got so bad that many Defence Forces members had no option but to supplement their wages by claiming state benefits.
The Fianna Fail TD raised the issue during Leaders' Questions in the Dail as retired members and relatives of current service personnel took part in a large demonstration outside Leinster House demanding action.
"Compliments and commendations don't put meals on tables," he told Employment Affairs and Social Protection Minister Regina Doherty.
"Members of the Defence Forces are men and women who have the same costs as the rest of us, but they are now finding it impossible to rear families, to get a mortgage, to tackle the day-to-day costs because they are serving our country."
He said the Defence Forces were experiencing an "exodus", with members leaving to take up better paid jobs in the private sector.
Mr Calleary said the 9,000 head count was the lowest in the history of the state and almost 500 below agreed levels. He said the number of officers had dropped from 966 to 817.
"At every level in our Defence Forces there is a crisis," he said.
Sinn Fein TD Aengus O Snodaigh said: "There is chaos in the Defence Forces.
"They are haemorrhaging members, not just long-serving ones but many new recruits.
"This is causing extra pressure on the existing low morale - the foundation of which any army, navy or air corps has to have."
Will this Government introduce measures in Budget 2019 to ensure that a career in the Defence Forces is not one where you must live in poverty? - @aosnodaigh #dail #LeadersQs @WPDF_2017 pic.twitter.com/cUuiY0cqR9— Sinn Féin (@sinnfeinireland) September 19, 2018
Ms Doherty acknowledged there were issues around pay, recruitment and retention within the Defence Forces. She said the Government would examine a submission handed in by the demonstrators and respond appropriately.
She said cuts to pay and allowances made during the financial crash were gradually being reversed and the Public Sector Pay Commission was examining ways to address recruitment and retention issues.
"We have had difficulties in regard to pay over recent years but it's not without having good reasons," she told the Dail.
"Every single public and civil servant in the country had their pay cut over the last number of years because of the economic crash. It's thankful we are in a position where we can unravel those cuts, we are in a position to bring forward new pay agreements and new stability agreements for the years going ahead.
She rejected Mr Calleary's suggestion the Government was only offering "platitudes".
"What is absolutely fundamental here is that every single man, woman and child in this country has pride in the Defence Forces and the actions they take both abroad and in Ireland in protecting peace, security and the safety of Irish people," she said.
PA & Digital Desk