Children are being "unnecessarily labelled" by medical professionals to avail of extra resources.
Parents seeking extra teaching help for their children are paying for them to be formally diagnosed with disabilities, according to the head of the National Council for Special Education (NCSE).
NCSE chief executive Teresa Griffin said she had been told first-hand by professionals that they had purposely misdiagnosed children in primary schools.
The practice - known as 'diagnosis for dollars' - is common for conditions such as Attention Deficit and Hyperactivity Disorder (ADHD).
Professionals are actively making some children "fit a certain category of disability in order for them to get a resource" even though they "don't theoretically meet the actual label".
Ms Griffin said assessments should only be used to help teachers and parents understand a child's needs but not linked directly to resources.
Under the current system, students require a formal diagnosis of conditions like Attention Deficit Hyperactivity Disorder (ADHD) before an extra teaching support is provided by the Department of Education.
This has led to a series of problems, including claims it reinforces disadvantage because parents from wealthier backgrounds can afford to pay for private consultations.
Many students in the public system are on long waiting lists and do not have the right to access special support until they receive a diagnosis.
Speaking on Newstalk Breakfast, psychologist David Carey said he is shocked by the accusations, adding he doesn't believe professionals would deliberately misdiagnose children.
"It's an outstanding and outlandish thing," he said. "We have some very strict criteria for the diagnosis of ADHD that must be followed."
Carey adds that for an accurate diagnosis to be made, data must be gathered from family members and teachers, as well as the child themselves.
"There is a subtle incentive at school level because in turn, the school gets additional resources, so this works from both sides if its happening. Children may present with some behavioural difficulties, teachers may leap to conclusions and the child must be assessed ... I think that aspect needs some scrutiny as well."
The Department of Education told the Irish Independent it was aware of Ms Griffin's concerns and had been working with the NCSE to create a new model to distribute special resources. "The department would be concerned at the possibility that any child would be labelled unnecessarily and accordingly accepted and acted upon the advice received from the NCSE.
"The department has taken steps to address this concern and has developed the new model for allocating resource teaching supports which, when implemented, will remove the need for a diagnosis of a disability to ground the allocation of resources," a spokesperson said.
A date has not yet been set for the introduction of the new system, but the spokesperson said Education Minister Richard Bruton anticipated it would be approved by Cabinet in time for September 2017.