Those who entered into contracts before 2010 will be able to retain perks which are above public sector pay policy.
But Mr Varadkar said had action not been taken in the wake of the Central Remedial Clinic (CRC) controversy — where it was revealed public donations were being used to supplement executive pay — the bill could have run into millions more.
“Where the top-up pre-dated 2010 and on a contracted commitment they can be retained for that person, and that person only, but any future appointment will have to be entirely compliant with public sector pay policy. I think it’s important that we have put a stop to it now. I know if we had not put a stop to it, I think you would have seen pay escalating into millions over the years.”
The controversy over pay was first highlighted in 2013 when it emerged that more than 200 employees in voluntary hospitals and agencies were reported to be receiving top-ups of around €3.2m.
It is understood the Attorney General came back and advised the Government that voluntary hospitals and health agencies were within the law when they made the extra payments.
There are still 64 people on salaries over and above the official rates and they will be permitted to keep these top-ups as they entered into agreements before 2010.
Fianna Fáil spokesman Billy Kelleher said: “We have to ensure value for money in terms of public service pay.
“Top-ups that are above and beyond what would be regards as normal levels of pay have to be addressed.”
Public Expenditure Minister Brendan Howlin, meanwhile, said tops-ups in the private sector should be more transparent.
“Obviously, we all have to live within the law. We take the advice of the attorney in these matters. I think, as is in other areas outside the public sector, we need transparency in how and what everybody is paid. Certainly, in the public service, we’d have complete transparency about how public pay is made up. We need to ensure that headline figures are in compliance with pay norms and we have control over the public pay bill and that is fundamentally altered in the last few years.”