The government has agreed to begin returning pension cuts made to retired public servants during the financial crisis.

The Cabinet has signed off on a proposal from the Public Expenditure Minister Brendan Howlin, targeted at those on low pensions.

Around 90,000 public sector pensioners will benefit at a cost of about €90m over three years.

Under the plan, they will receive around €400 next January, €500 in 2017 and €780 in 2018.

Mr Howlin said: "The proposals approved today deliver upon my stated commitment to move towards reducing the burden of public service pension reductions, with the initial focus on the people in receipt of low pensions, at the earliest date economic progress permits."

"These proposals in respect of public service pensioners are prudent in the context of the fiscal space available to the government and will not compromise the ongoing recovery in the government finances," he added.