Minister for Health Mary Harney has defended the approval by the HSE board of a bonus of about €70,000 for its chief executive Prof Brendan Drumm, in respect of his work for 2007.
Opposition parties earlier criticised the payment. Fine Gael said it was "unjustifiable" and "outrageous" in the present environment, while Labour and Sinn Féin said the bonus should not be paid.
Ms Harney said the approval of such a payment was "entirely a matter for the board".
It was in line with Prof Drumm's contract of employment, she said.
Ms Harney said the bonus payment scheme had been introduced in about 1987 and that it had not been introduced by the present Government.
She said the payment approved for Prof Drumm related to 2007 and that it was only now coming into the public domain. No bonuses would be paid to public servants in respect of 2008, or probably 2009.
"We live in a very different era now," she said.
Ms Harney said she had "total confidence in the board of the HSE" and in the chief executive, who "does a fantastic job".
It had not been easy to find someone suitable for the post when it was first advertised, she said.
And she noted Prof Drumm would have earned "substantially more" had he continued instead to practice as a clinician.
Asked if she would request that Prof Drumm waive the payment of the bonus, Ms Harney said it was not a matter for her.
"I am not going to lecture anyone on what they should or shouldn't do. That's a matter for each individual."
Taoiseach Brian Cowen said the bonus related to an "historic situation in 2007".
He said performance-related pay structures were in place since 1987 as part of overall remuneration in the public service, subject to board approval.
“The terms of employment and the employment contract he has relates to a performance bonus part of his wage structure and it relates to 2007," Mr Cowen said.
“Since 2008 we have made a direction that no such bonuses should be paid. And that has been something that we've introduced in this administration, so it relates to that historic situation in 2007.” He said the situation was different now.
“We're very cognisant of the need to ensure that wage structures reflect the present reality, at the same time make sure we get good people into positions of responsibility where significant taxpayers' money is being spent.”
Liam Downey, a member of the remuneration committee of the HSE board, acknowledged that 2007 had been a "particularly difficult year" for the HSE.
Speaking on RTÉ's News at One, he said Prof Drumm "continues to put in a huge contribution to the reform of the health service".
Mr Downey said the payment was also "entirely transparent". The provision had been made for it in the 2007 accounts
Fine Gael health spokemsan Dr James Reilly said the bonus payment was unjustifiable "at a time when the health budget is being slashed, beds are being closed and the worst symptoms of the health services are getting even worse".
“A €70,000 bonus, twice the average industrial wage, on top of a €320,000 salary for the head of our broken health service is outrageous at a time when 300 patients were lying on trolleys around the country yesterday, 9,000 operations were cancelled in the first half of the year and there has been a 70 per cent increase in delayed discharges.
"It is impossible that this level of performance could be deemed worthy of a bonus like this. How are taxpayers, workers on average and lower wages, those who have lost their jobs and those who may be in danger of losing their homes supposed to feel about this?"
Labour Party health spokeswoman Jan O'Sullivan said the notion "that we are even countenancing" handing over such a bonus payment would "shock most fair-minded people".
"This bonus covers the year 2007, a year in which the HSE was beset by controversies over cancer misdiagnosis, outrageous waiting lists, critical shortages of paediatric intensive care beds, delays in the roll-out of cervical cancer screening, and problems with hospital hygiene, to name but a few," she said.
"Now we are to respond to these failures, not by bringing the HSE management to book, but by giving the head of the organisation a pat on the back worth almost twice the average industrial wage." Ms O'Sullivan said this made "absolutely no sense whatsoever".
She called on Minister for Health Mary Harney to "ensure that common sense prevails and that the payment of this bonus does not go ahead".
Sinn Féin health spokesman Caoimghín Ó Caoláin said the very existence of "massive bonuses" for top executives who are already paid the highest salaries in the public service, let alone the approval for such bonuses in the present economic crisis, showed "that these people are totally divorced from the everyday reality of ordinary citizens".
"It is nauseating that the HSE Board should approve this bonus for the year 2007. It was in the autumn of that year that the current regime of health cutbacks was first imposed," he said.
"Contrast these bonuses with such heartless cuts as the slashing of home support hours for children with autism. Contrast them with the fact revealed yesterday that children with arthritis must wait up to 13 months to see the State's only paediatric rheumatologist in Crumlin children's hospital."
Mr Ó Caoláin said this system of bonuses should be ended.
The Impact trade union said it noted the bonus award related to 2007, the same year the HSE introduced an embargo on recruitment, preventing vacant posts from being filled.
"At the time the HSE said this was in response to a financial overrun. The effects on health service provision were far-reaching at the time. The embargo was a blunt instrument with which the HSE caused considerable hardship to service users and staff. The Labour Court found, subsequently, that the HSE had acted in breach of several provisions of different agreements in relation to the embargo."
The union said it believed it was "inappropriate" that this kind of approach to health service delivery should be awarded with a bonus worth around 20 per cent of "a very generous salary".
"That the bonus should be awarded at a time when resources are supposed to be scarce, and in a year when employees of the HSE had their pay cut by 7.5 per cent by the so-called 'pension levy', only adds to the sense of injustice that Impact members felt when news of Professor Drumm's bonus was revealed today."
The approval of the bonus payment by the board of the HSE, understood to have been given recently, comes when the HSE is in the middle of a major cost-cutting programme and is making plans to reduce spending by up to €1.2 billion next year.
The bonus payment for Prof Drumm is for 2007. While it would normally have been paid in 2008, a decision on whether to pay it was postponed consistently and only taken over the summer.
The Irish Timeshas learned that the bonus payment amounts to just over €70,000. It is understood the money has not yet been drawn down.
It emerged last year that €1.4 million had been paid in performance bonuses to other senior HSE staff in respect of 2007. The HSE board has suspended consideration of performance-related awards in respect of 2008, which would normally be paid this year, following a request from the Department of Health.
In a statement last night the HSE said: “The board of the HSE has approved payment of a performance award to Prof Drumm based on his performance in 2007. During 2007 activity in many community and hospitals services increased from the previous year and the HSE met its accountability requirements by delivering a balanced vote.”
In 2007 Prof Drumm received a bonus of about €80,000.