DUBLIN (Reuters) – Ireland’s health service will cut back on care for the elderly and overtime pay to find 130 million euros ($163 million) of new savings aimed at halting a spending overrun heavily criticized by one of the country’s lenders this week.

Ireland has diligently adhered to the terms of its 85 billion euro EU/IMF bailout and is set to meet its deficit reduction targets for this year, mainly thanks to better-than-expected revenue growth.

However, the social protection and health departments have spent more than anticipated and in a draft document seen by Reuters on Wednesday, the European Commission gave an unusually frank assessment of the performance of the health ministry.

It said that while stubbornly high unemployment had led to larger-than-budgeted demand for free healthcare, the inability to deliver savings “pointed to weaknesses in budget management and accountability”.

Ireland’s Health Service Executive (HSE) responded by announcing a raft of emergency cuts that included a halving in the use of staff not directly employed by the executive, a 10 percent cut in overtime and a 6 percent reduction in the hours of those who care for the elderly in their homes.

“In compiling these measures, every effort has been taken to target areas that do not impact on direct patient services, with a view to protecting, inasmuch as is possible, the most essential frontline services,” the HSE said in a statement.

“However, it is inevitable that some impact on service delivery will be experienced through the implementation of these measures.”

The HSE said that were it not to begin to implement the measures through the rest of this year and early next, its deficit, which will stand at 259 million euros by the end of August, would balloon to 500 million euros within four months.

It said the 130 million euro package would be introduced in addition to other non-operational measures, including cash acceleration of receipts from health insurers.

Ireland’s health department, which accounts for almost a third of all government spending, was tasked with finding savings of over 500 million euros this year and the Commission’s report found that to date, only 22 percent had been achieved.

With Ireland’s budget deficit still set to be above 8 percent of gross domestic product (GDP) this year, almost one billion euros of new spending cuts are needed across government in both 2013 and 2014, and charity groups feared the worse.

“The cuts announced today by HSE will inevitably hit the most vulnerable in our community. They will mean that many people desperately in need of care will either be unable to access services or will have their already overstretched services reduced even further,” Age Action Ireland said. ($1 = 0.7982 euros)

(Reporting by Padraic Halpin; editing by Stephen Nisbet)