Threshold, the housing charity, has called on the Government to "right the wrongs" of the last two budgets next month.
The organisation claims the restrictions on rent supplement eligibility contained in Mr Charlie McCreevy's last budget have created "confusion and widespread hardship".
The measures were contained in the so-called "savage sixteen" cuts, which affected a range of welfare benefits including rent supplements, back-to-education grants and creche payments.
In a pre-budget submission presented to the new Minister for Finance Mr Cowen today, Threshold calls for the restrictions in eligibility to be reversed, the amount of rent supplement to be increased and for 10,000 new social houses to be built next year.
Mr Patrick Burke, the director of Threshold, said the current legislation has reduced the safety net of rent supplement for vulnerable people "to the size of a postage stamp".
Under last year's new rules, new applicants for rent supplement must pay their own rent for six months before becoming eligible, unless they can prove they were homeless or are in need of emergency housing. Threshold claims this has resulted in people being forced to live in overcrowded conditions in order to be able to afford their rent.
It also affects people who have relationship breakdowns, women and children fleeing domestic violence and young people moving from rural to urban areas in search of work.
People also cannot receive rent supplement if their spouse is working over 30 hours per week. This, Threshold argues, is a disincentive for people to seek employment, especially low-paid work.
Tenants are also denied rent allowances if they refuse offers of local authority housing or who leave such accommodation without reasonable cause.
The group has also demanded a reversal of the decision to introduce a cap on allowances. Under this measure, each health board was permitted to introduce maximum rent levels above which rent supplement would be denied.
Threshold claims this has forced many young people and families to live in cheap, cramped and unsafe conditions as they cannot afford anything better.
A Threshold survey last September found the average rent for a bedsit in Dublin was €121 per week, while the maximum allowable rent cap is €115.
According to the Census of 2002, 141,459 households, or 11 per cent of the total, are living in private rented accommodation.
