Retirements from the public service are running so far ahead of target that the Department of Finance believes it will be able to cut around €700m a year off the public-service pay bill without cutting pay or offering staff a HSE-style exit package.

By the end of the first week, over 1,000 administrative health workers had enquired about the HSE voluntary severance/early retirement package indicating that health minister Mary Harney will achieve her target of 5,000 departures before year-end.

HSE staff are being offered three weeks' pay per year of service plus statutory entitlements of two weeks, while those aged 50 and over can retire with an immediate pension based on actual years' service.

A Finance spokesman said last week that, while nothing can be ruled out, it is "unlikely" that the HSE scheme will be extended throughout the entire public service.

He said there had been a surge in retirements and departures from the public service, the vast majority of which are not being replaced because of the government ban on recruitment and promotion.

Since March 2009, the numbers employed throughout the public service have dropped by over 12,000, saving around €700m from the public-service pay bill. In March 2009, when total employment in the public service stood at 319,400, finance minister Brian Lenihan had targeted a cut in public-service numbers to 309,400, or a reduction of around 10,000 by the end of this year .

But according to figures released by Finance last week, the overall number has dropped to 307,200 by the end of September – over 2,000 ahead of target.

The Finance spokesman said a further raft of retirements is expected over the next few years.