Children with social and emotional needs are unable to take up crèche places because of the abolition of the Crèche Supplement from January 1st.
The cut, announced in the Government estimates in November, was one of 16 implemented by the Department of Social and Family Affairs. It had been paid to parents dependent on social welfare.
It was hoped that Health Boards would continue to pay existing crèche supplements for a limited period while crèches arrange for alternative funding.
However, it has emerged that new applicants for crèches are being refused the supplement with effect from last week.
Sister Majella McCabe, manager of Our Lady's Nursery in Ballymun, where the attendance of almost all 58 children is dependent on the continued payment of the crèche supplement said the situation was "dreadful".
Mr Des Stone, community welfare officer (CWO) with the Northern Area Health Board, told The Irish Times that new applicants were being refused in the Ballymun and Finglas areas.
He said there was one child the public health nurses have identified ready to start in the crèche this week who cannot be taken on.
" I just don't know what's going to happen with the rest of the children and I can't make plans or budgets until I do," he said.
A spokesman for the NAHB said the authority hadn't been given any additional funding.
Ms Mary Brady, manager of Ballymun Day Nursery, where about half the 115 children attend with the help of the crèche supplement, said she had a place for a child but did not know whether she would be able to admit any.
The NAHB had told her they would pay existing supplements for the time being.
A spokesman for the Department said CWOs could continue to make crèche payments "in exceptional needs circumstances".
