The Minister for Health has said the estimated €500 million bill to compensate nursing home patients will not come out of her Department's current budget.
Ms Harney told the Dáil that a supplementary spending estimate would have to be agreed by the Government later this year as a result of yesterday's Supreme Court decision striking down the Government's attempt to retrospectively legalise illegal nursing home charges to medical card holders.
Responding to concerns raised by Labour leader Pat Rabbitte about the possibility of cutbacks, Ms Harney said: "I believe it will be necessary to bring a supplementary estimates through.
"The health budget for 2005 could not sustain a repayment of money in excess of €500 million. That would be grossly unfair on services and would involved a serious cutback in existing services if we were to do it.
"I would anticipate that the Government will bring forward a supplementary estimates later this year." Ms Harney said she would consult her officials to see how soon revised legislation would be put before the House.
She said: "Before Christmas I was accused of rushing things, so a day after the decision I'm not in a position to say when. I'd like to do it soon because we're losing € 2.5 million a week in the health services."
The Supreme Court ruled the Health Bill had illegally charged elderly patients for nursing home charges for up to nearly 30 years.
However the seven-judge court allowed the Government to use the Bill to impose such charges in the future.