Finance minister Brian Lenihan has extended the deadline for public servants to avail of early retirement after just 1,400 workers applied to quit by the original deadline of 1 September.

While no target was set for the number of staff who might leave voluntarily, there were expectations that at least 15,000 would leave and save the exchequer a net €500m off the €20bn public-service pay bill.

As matters stand now, 1,400 staff departing would only save less than €50m.

Even adding in the 400 or so who applied for the career break scheme by last July's deadline – which pays up to €36,000 to take a three-year break – this would save, at most, another €15m.

In an effort to entice more departures, Lenihan has extended the scheme until 16 October. The scheme allows those aged 50 and over to retire on an immediate pension without actuarial reduction.

While the take-up is low, some departments are set to lose a disproportionately large number of staff.

Of the 1,400 who have applied so far, 330 – or more than one fifth of the total – are from the Revenue Commissioners.

Revenue staff would have the best chance of being hired by private businesses keen to employ a government tax official.

The poor take-up means Lenihan will have to turn to the less palatable option of public-service pay cuts if he wants to reduce the pay bill.

The €500m savings expected from the early retirement/career-break scheme would require a 2.5% pay cut across the entire public service.

It is understood the ongoing recession and the continuing rise in unemployment persuaded most senior public servants to stay put despite the generosity of the offer.

For example, an assistant principal officer aged over 50 in the civil service on the maximum salary of €90,800 would be looking at losing over €50,000 a year for at least 10 years if he or she opted to leave early.

Confusion over whether the lump sum of one and half years pay paid on retirement would be taxed, as strongly hinted by Lenihan, also affected the numbers thinking of taking the plunge.

Earlier this month, the Commission on Taxation recommended that lump sums over €200,000 be subject to tax.

This is at least expected to clarify the situation and the minister hopes this will convince a larger number to leave.