New rules drawn up by the Department of the Environment will reduce the amount paid in grants to the elderly and disabled for work on their homes.
The new rules will also make it harder for many people to qualify for the home improvement grants – which help them to buy things like stairlifts and ramps or renovate their homes.
The department is also considering the introduction of a “claw-back” – where the homeowner will have to repay the State if they sell their house.
Those receiving grants over €15,000 may be forced to repay the entire amount on a “sliding scale” over five years if they sell their house.
The raft of changes came into effect on January 1.
Elderly and disabled people will see cuts of more than 40 per cent to certain payments.
There will also be significant reductions in thresholds and changes to eligibility rules that will see some elderly people lose their grants entirely.
In a new move, officials will assess the incomes of the entire family before determining how much a person will get in grants.
Minister Jan O'Sullivan told RTE's Morning Ireland today that the government's allocation for the grants have been increased from €35million last year to €38million this year.
"There have always been a very large number of people applying for the grant and that's one of the reasons for doing the review, to make sure that the money goes to those who most need it."
The new changes will apply to new applicants for the grants. There will be a reduction to the maximum grant in the older person's grant, the Minister said.
She said the maximum grant for people with disability remains at €30,000. The older person's grant has been reduced from €10,000 to €8,000.
The Minister said the average amount given to older people around the country was €5,000, and this was the reason why the grant was reduced.
She stressed that older people under 66 years will still be able to apply for grants under the mobility aid grants and the disability grants.
If a person's income is less than €30,000 per year, they will be asked to make a five per cent contribution, Minister O'Sullivan said.
And if an income is €60,000, the person will be asked to make a 30 per cent contribution.
Eamon Timmins, Head of Advocacy at Age Action Ireland said the cuts to the grants will affect three schemes - the home adaptation grant for disabled people, the housing adaptation grant for the elderly, and mobility aid grant scheme.
He said the cuts will affect people who are terminally ill, and people who are "hanging in there trying not to go to hospital or to a nursing home" - some of "the most vulnerable people in society".
He said the government has "moved the goalposts" without officially announcing the changes.
The age category has been moved from 60 up to 66 years, and even the lowest wage category will have to pay some contribution to the cost of the works on their homes.
He said "in the end some of the poorest people may lose out".