Fianna Fáil MEP Mr Niall Andrews has called for the introduction of a payment for public servants working in Dublin.
Mr Andrews said allowances exist for public servants working in other European capital cities such as London. He said the UK allowance is worth £3,500 sterling per year for nurses working in London, which takes into account the increased costs of living.
"Dublin city has higher living costs than the rest of the country. Even within a European context Dublin is 22 per cent above the average standard of living in Europe alone," Mr Andrews said.
He said: "This should be reflected in wages paid to lower- and middle-income public servants working in Dublin. It also will play a part in ensuring that public servants, including from the nursing sector will be willing to continue to work in Dublin into the future".
Many companies from the private sector, banking and financial services haves schemes that pay allowances to employees working in Dublin.
Mr Andrews called on the State to introduce similar economic measures saying: "This issue has to be addressed not only by employers".