The Opposition reacted angrily to news that the Department of Education is calculating income from the Government's savings incentive scheme in means tests for college grants.
The development could mean that students whose parents' income is only marginally below the grant threshold might break the threshold when their Special Saving Incentive Accounts top-up is included, losing the opportunity of a grant.
The news comes just weeks after a €42 million initiative by the Minister for Education, Mr Dempsey, to increase grants and bring an additional 11,000 students into the grant net.
The Opposition accused the Government of being mean-spirited over the practice.
Labour's education spokeswoman, Ms Jan O'Sullivan, said the practice should be reviewed.
"It seems a little mean-minded because people don't get the money until the five years are up. They should have been a lot more honest about it. This information should have been given out at the time," she said.
Some savers might not have joined the scheme if they had known that the Department would adopt this policy, she said.
The Fine Gael deputy spokesman on finance, Mr Paul McGrath, said that people might have to leave the scheme to avoid the risk of losing a grant.
"This is extremely mean-spirited by the Government. On the one hand the Special Savings Incentive scheme is a generous one, giving an extra 25 per cent to savers. However, the additional money is not immediately available."
He added: "If you try to withdraw the money inside the five years then you lose the Government bonus."
About 40 per cent of adults opened accounts in the scheme in which the Government gives savers €1 for every €4 they invest.
The Department of Education confirmed yesterday that it was including the top-up and any interest receivable as reckonable income in the years before the accounts mature.
A spokesman said the top-up and interest income would be averaged out over the five years of the scheme, meaning that 20 per cent of the gain at maturity would be included as reckonable income each year.
He said this was consistent with the Department's policy of including other long-term investment products, such as An Post saving bonds, in means tests.
The income of savers who joined the scheme in April 2001 would have been reckonable in means tests for children in the past academic year, he said.