Officials warned that failure to extend a scheme giving rent-a-room relief to welfare recipients could put hundreds of people at risk of homelessness.
In a briefing, Social Protection Minister Dara Calleary was told Ukrainian refugees and others in "straitened circumstances" were most likely to be hit if the measure was removed.
It said a temporary disregard of up to €14,000 per year in rental income for people registered on social protection schemes should not be let expire.
Officials said the measure was first introduced after the Russian invasion of Ukraine when rental properties were already in short supply.
However, the briefing said "excess demand" for housing continued and that removal of the scheme could end up leaving some homeless.
It explained how there were 648 people on social protection schemes who were providing accommodation last year.
Officials warned that if the scheme ended, those individuals might decide not to continue renting a room.
"At a time of excess demand in the Irish rental market, this will prove challenging. Many of the tenants may be in straitened circumstances and may include refugees from Ukraine," the briefing said.
"The ultimate risk, in this scenario, is that some people may become homeless as a result. There is also a very significant reputational risk to the Department, the Minister and, ultimately, the Government," it added.
The briefing said there were three options open to the minister - do nothing, make the relief permanent, or extend it for a further 24 months.
It cautioned against a permanent extension saying it might be premature "given the unique and dynamic nature of the Ukrainian crisis and the - hopefully temporary - current tightness of the Irish rental market."
Instead, officials suggested extending the scheme for a further two years, meaning it would not need to be re-examined until March of 2027.
The briefing said there was no real cost to the taxpayer from the scheme because if it were not available, home owners simply would not rent a room.
"Under these measures, people simply retain their current rates of payment and benefits but are incentivised to make accommodation, not currently in use, available for use," it explained.
Officials argued it might even be saving the Exchequer money because it helped to keep Ukrainian refugees out of more expensive state-provided accommodation.
It also said there was an important social benefit to the relief that helped promote "cross-cultural understanding, integration and cohesion."
In a handwritten note, Minister Dara Calleary said he was happy to extend the relief for an additional period of two years.
Asked about the decision, a spokesman for the department said some of the measures introduced after the invasion of Ukraine specifically included a "sunset clause."
This was helpful where the policy space was "particularly dynamic," and allowed the State to keep schemes under rolling review.
"Following on from this submission, the Minister] extended the rent a room regulations effective until March 2027," the spokesman said.
"The Department will review the position in relation to these provisions closer to the date," he added.
Reporting by Ken Foxe
