The Irish Refugee Council is calling for a change to the way asylum seekers are treated with the introduction of a new system, which it says is more humane and less costly to the State.
Under the current Direct Provision system, asylum seekers are placed in full-board accommodation centres and not allowed to work.
Instead they receive a weekly payment of €19.10 per adult and €9.60 for every child, a rate that has not changed in 19 years.
The Irish Refugee Council is proposing a new system, saying the human and financial cost of Direct Provision is too high.
Between 2000 and 2010 the council says the State paid €655m to private companies who operate the housing centres.
The new proposals include the provision of independent accommodation for families within a certain time-frame and permission for asylum seekers to work after six months in Ireland.
The IRC is also calling for legal advice to be made available along with services for those with special needs and vulnerabilities.
Launching the document today, Mrs Justice Catherine McGuinness said: "We cannot continue to ignore the impact of Direct Provision on children who are growing up in an environment where the risk is that they fail to thrive, with unknown consequences for the future.
"I commend this document to the authorities and would invite them to engage with all interested parties in working towards an alternative system that we can all be proud of", she said.