The Social Protection Minister also reiterated he believes there will be a united Ireland during his lifetime.
His comments came after a backlash from his speech at the MacGill Summer School this week, where he floated the idea of linking dole payments with the cost of living.
Mr Varadkar is tipped as a potential successor to Enda Kenny but has played down talk of leadership challenge.
Speaking in Donegal this week, he suggested dole payments could in future be index-linked, a measure already used in Nordic countries. Such a move, however, could cost the State over €1bn in just a few years.
Yesterday, Mr Varadkar admitted the idea had not been discussed at Cabinet. Any change on indexing payments would not happen in the next budget, he said.
Mr Varadkar also played down suggestions that his remarks this week were a launch for the Fine Gael leadership. He quipped that anything he had done recently had been interpreted as a leadership bid.
“I’m just waiting for the moment when I sit on the toilet and somebody, some commentator somewhere, decides that that’s part of some strategy. It’s not, I’m the minister for social protection; these are my responsibilities. I attend a summer school and what am I going to talk about? Of course I’m going to talk about social protection.”
He also stressed “a very big diplomatic offensive” is under way to ensure Ireland is considered a special case in Brexit negotiations.