The Department of the Environment has introduced changes to housing grants for elderly and disabled people, which the charity Age Action says are cuts that will affect the vulnerable in society.

However, Minister of State Jan O'Sullivan has rejected that criticism and said the budget has been increased for the grants.

The changes affect three grants: the housing adaptation grant for people with a disability, housing aid for older people and the mobility aids grant.

Local authorities were notified by the department on Monday and told to implement them immediately.

Under the changes, the eligibility age for the older person grants has been increased from 60 to 66.

All household members over the age of 18, who are not in full-time education, will now be included in means assessments for grants.

There are also changes to the income bands for the housing adaptation and housing aid schemes.

Households in the lowest band with an income of €30,000 or less, who were previously granted 100% of costs, will now only get 95%.

The upper income limit to be eligible for both schemes has been reduced from €65,000 to €60,000.

Any applicants for grants will have to prove they have paid the Local Property Tax before they can qualify for the schemes.

Around 10,000 people a year avail of the three means-tested grants.

A spokesperson for the department said the changes have come as a result of a review of how the grants operate.

Age Action's Eamon Timmins said the cuts target the most vulnerable in society and will make it harder for those affected to remain in their homes.

Mr Timmins said older people "struggling to stay at home" would end up in acute hospitals and nursing homes because of the changes.

"We're very concerned that what they seem to be doing is trying to stretch scarce resources further to make it look like they're getting to more people, but in effect some of the poorest people may lose out," he said.

However, speaking on the same programme, Ms O'Sullivan said the reduction in the maximum grant was only for older people and not the disabled.

She said there was actually a €3m increase in the overall amount of money being allocated to the schemes.

The minister said: "I believe that these changes will actually mean that more people will be able to stay in their own homes because they will be able to qualify for this grant, and because there will be an increase in the money. It will be spread around amongst a large number of houses.

"But I do want to stress that if you have a disability, if you need something like a chairlift, you can still apply under the age of 66 for either a mobility or a disability grant from your local authority."

Ms O'Sullivan said the reason the review was carried out was to make sure the funding is properly used.

She said the reduction in the older person grant from €10,500 to €8,000 came after an analysis of the grants from local authorities around the country.

"Very few were getting €8,000 and the average was €5,000," she said. "The intention is to ensure that the money goes to those who most need it."

Fianna Fáil leader Micheál Martin has said the Government should lay off older people.

Mr Martin said they had been unfairly targeted by the Coalition.

Meanwhile, Taoiseach Enda Kenny defended the changes to housing grants for elderly and disabled people.

He said the system for processing applications would be more efficient and the changes are "designed to give more immediate effect in the interests of elderly people who need it."