More than 30,000 single parents will lose their One-Parent Family payments this July in a move described as "Thatcherite" by Fianna Fail.
The "sneaky changes", being introduced on July 2, will result in thousands having their payments slashed by €86.
The move is the final stage in a Government plan to phase out these payments once children reach seven years of age in a bid to encourage single parents off welfare and into work.
Fianna Fail leader Micheal Martin said the move was an "insult" to lone parents and one which "reflects a mindset and policy orientation that are as Thatcherite as one could get".
However, Taoiseach Enda Kenny said the measures are aimed at reducing long-term social dependency and encouraging people to get back to work.
But other changes to the welfare system have already contributed to a drop in the proportion of single parents working, the Dail social protection committee was told yesterday.
Some 49pc of recipients of the One-Parent Family payment were in employment in 2011, but this fell to 36pc in 2013, partly because of the general economic crisis but also because they were no longer permitted to work on community employment schemes while keeping their welfare payments, said department official Niall Egan.
The proportion of lone-parent welfare recipients working has gone back up to 45pc, but continued reform is needed to stop these families being trapped in consistent poverty, he said.
Groups representing lone parents told the committee that the forthcoming changes will hit the incomes of already impoverished single-parent families and actually make it harder for them to work because of the way the new social welfare supports are structured.
Some families will move to a new transitional jobseekers' payment once their youngest child reaches seven years, but they will be €53-a-week worse off if they also work in low-paying jobs, said the group Spark (Single Parents Acting for the Rights of Kids).