The living alone allowance for pensioners and vulnerable people is set to be increased by €5 in next week's Budget.
Around 200,000 people will benefit from the rise in their allowance.
The payment is expected to increase from €14 to €19 per week, according to the Irish Independent.
Paddy Connolly, CEO of Age Action Ireland, says the government needs to go further.
He said: "I think any increases are welcome, and the living alone allowance or a large number of people living at home is very important.
"I think the key for us which has been ignored in the last couple of budgets is the increase in the state pension of €5 per week at a minimum.
"For anyone living solely on the state pension, they are close to or teetering on the brink of poverty."
It is also expected that the fuel allowance will increase by €3.50 a week.
The Labour party said there is a "pressing need" to increase the level of fuel allowance as the Carbon Tax is also set to rise in the Budget.
The party's Social Protection spokesperson Seán Sherlock called for the reinstatement of the four extra weeks of fuel allowance in 2021 and a commitment to pay the Christmas Bonus.
He said: “One of the course sequences of COVID-19 is that people are spending more time at home and this is leading to much higher heating costs and electricity bills.
"The Government have to acknowledge that in the Budget.
“Earlier this year four extra weeks of fuel allowance were paid as part of the 2019/2020 fuel allowance season so it is essential that level of support is also restored."
He added: “We also need certainty on the Christmas Bonus payment for this year.
"It’s our view that this annual double payment must continue, and the government parties have to deliver for those on fixed incomes as it provides a great boost to local shops and communities."