The direct provision system needs “root and branch reform, preferably replacement”, according to the Joint Oireachtas Committee on Justice and Equality.
In a new report on the system - which provides accommodation and essential services for asylum seekers here - committee members say direct provision is 'not fit for purpose'.
They highlight particular issues relating to children in the system, challenges faced by those in direct provision in accessing the labour market, and the 'inadequate supports and services' being offered to vulnerable people.
The committee is now calling for a shift towards providing 'own door' accommodation for those seeking international protection here, offering a mix of "independent and supported living to cater for the needs of all applicants".
They also say there should be a move away from a reliance on commercial running of direct provision services, and approved housing bodies should be involved instead.
However, they also say the State should be directly involved in building 'fit-for-purpose, self-contained housing units' for those that need it.
Committee Chairman Caoimhghín Ó Caoláin said: “Over the course of our engagements, it became abundantly clear to the Committee that the Direct Provision system is flawed and in need of fundamental and ambitious reform or, preferably, replacement.
"The Committee, therefore, is of the view that an expert group be established to conduct a comparative analysis of best practices in other jurisdictions that may be adapted for implementation in Ireland."
The report - which is available online - has been published after members of the committee held public engagements earlier this year with individuals and organisations such as the Immigrant Council of Ireland, the United Nations High Commissioner for Refugees (UNHCR) and the Children's Rights Alliance.
Committee members also visited direct provision sites in Mosney and Monaghan.
Direct provision was introduced in 2000 amid an increase in numbers applying for asylum in Ireland.