It is claimed that families applying to Clare County Council for a 3rd-level grant are being asked to submit proof they have paid their household charge.
Applicants have told that in order to progress payment of the first installment of the grant they must submit a receipt for the household charge.
In a statement the Council says processing Higher Education Grants is done at a cost and the household charge was introduced to cover the cost of providing local services such as assessing and processing grants.
It also says it is the policy of the Council to ensure that benefactors of services such as Higher Education Grants pay the Household Charge as required by law.
The Campaign Against the Household Charge has described the move as a new low for the government.
A spokesperson said councils who have had their budgets cut seem to be getting desperate and are willing to use any means to get the household charge registration figures up.
The Minister for Education says it is reasonable for County Councils to ask grant applicants if they have paid the household charge before processing their applications.
Minister Ruairi Quinn says pressure should be put on people who choose not to pay the tax when they are able to do so and he expects more county councils will follow suit.