Minister for Housing Willie Penrose has said economic research is under way into the merits of introducing a deposit protection scheme.
Housing charity Threshold has been calling for such a system for more than 20 years, saying it would reduce disputes between landlords and tenants.
It wants a third party to hold deposits during the term of a lease, as opposed to landlords. When a dispute arises the landlord and tenant would make their claim to the third party.
The organization said unreturned deposits were at the root of almost 4,000 of their 2009 cases, and over 3,000 cases in 2010.
Speaking at the publication of the charity's annual report in Dublin today, chairwoman Aideen Hayden said the organization was "fed up" with landlords failing to return deposits.
The problem, she said, "could be solved very well with the stroke of a brush by the creation of a deposit protection scheme."
Mr Penrose said he had asked the Private Residential Tenancies Board to research potential schemes and report back to him next year at which point he will make a recommendation to Government.
The Minister said an amendment to the 2011 Residential Tenancies Bill proposes an introduction of fines if a tenant's deposit is retained illegally.
"This could be a first step towards the elimination of this problem which can have very heavy financial impacts for tenants," Mr Penrose said.
Other recommendations agency include an apartment certification scheme, the payment of rent supplement directly to landlords and the introduction of a protection scheme for renters in case of landlord insolvency.
The number of people on the housing waiting lists has almost doubled from 56,000 people in 2008 to 98,000 last year.
A survey included in the organization's report showed those experiencing homelessness had likely experienced either a relationship breakdown, a change in employment or had a "highly chaotic housing biography".
According to the report Threshold's advice centres in Dublin, Cork and Galway handled just under 20,000 queries and questions last year.
The report praised the Government's new housing policy which it said could help unblock the pathway from homelessness to home through promoting housing choice.
Ms Hayden said homelessness prevention was proven to help keep those at risk from becoming homeless and frontline organizations like Threshold provided that advice. But the organization, she added, faced a fiscal crisis. Government funding for the agency decreased by 54 per cent in 2010.
"Housing advice works, that's the bottom line. It isn't just the experience of Threshold, it isn't just the experience of Ireland, it's the experience internationally," Ms Hayden said.
"We are calling on the Government in the upcoming budget to basically put their money where their policies are."
Ms Hayden said the organization plans to continue to be a "pain in the ass" and work for greater homelessness prevention and legal reform.