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About 60,000 public service staff earn less than their colleagues, for the same work, as a result of salary reductions introduced for new appointees since 2011.
The cost of reversing this much-criticised two-tier pay system is €200 million, according to the report published by the Department of Public Expenditure and Reform.
The report, published on Friday, may pave the way for new talks between the Government and unions on ending the existing two-tier pay structure.
However there is no deadline set out in the document for when the pay differentials arising from cuts applied to those recruited after 2011 will be reversed.
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The Department report re-states the position set out in the current pay deal for State employees that any talks on the two-tier remuneration issue would seek to see how it could be addressed without adding to the €880 million overall cost of the agreement.
Two-tier pay is a hugely controversial issue in the public service, particularly in education, and will feature prominently at the forthcoming teachers’ conferences over Easter.
The report only deals with the fall- out from the 10per cent cut in pay for new entrants introduced from the beginning of 2011.
It excludes, for example, separate cuts to allowances imposed on public service staff - such as the abolition of the €1,236 HDip payment for teachers - which have also contributed to the pay gap between those appointed before and after 2011.
The report also does not take into account the decision in 2010 that all public servants recruited from 2011 should start at the first point of the pay scale.
Teachers, for example, traditionally started on the third point of the scale.
Apart from criticism over the two-tier pay system during the forthcoming trade union conference season, the Government will face political pressure from Fianna Fail which is demanding that it set out a clear path to achieving pay equality.
Ironically as it prepares to enter talks on the new entrant pay issue, some teachers at their conferences next month are set to seek to raise the bar higher by looking for pension equality for recent entrants. Staff recruited since 2013 are covered by a revised superannuation scheme under which pensions are based on career averages rather than final salary, with benefits indexed in line with inflation.