Legal rights organisation FLAC claims there is 'no clear legal basis' for cutting the Pandemic Unemployment Payment of people who holiday abroad.
More than 100 recipients of PUP have had their supports cut after travelling abroad.
The Dáil has today heard calls to reverse the decision - although an effort by the opposition to annul the decision was defeated by the Government.
In a statement this evening, FLAC says legislation may allow for the suspension of payments in relation to Jobseeker's Benefit.
However, they suggest it does not go so far as to allow the Department sweeping powers to suspend or close other payments - including the PUP.
FLAC said in a statement: “Any decision on behalf of the Department to suspend those payments where claimants, who are residents of Ireland, take holidays abroad would be open to challenge on this basis.
“FLAC are requesting that the Minister withdraw Circular 35/20, immediately suspend this policy and ensure that claimants are not sanctioned financially in respect of holidays outside of the State.
"Further, any claimant who has been penalised by this rule, must have their claim reinstated and backdated as a matter of urgency.”
Earlier, Taoiseach Micheál Martin said cases where people were unaware they would lose payments before they flew should be re-examined.
Social Protection Minister Heather Humphreys has also said the payment won't be cut for those who travel abroad for essential reasons - saying people simply need to let their social welfare officer know if that is the case.
Sinn Féin leader Mary Lou McDonald, meanwhile, said the decision needs to be reversed.
She said many of those impacted had booked and paid for holidays months ago, but may not have qualified for a refund due to the Government's "ambiguous travel advice".
