Housing associations are being prevented from providing sheltered schemes or the elderly because of a lack of funding for care and support saff, acording to the Irish Council for Social Housing (ICSH).
It argues that the provision of more sheltered housing, particularly in areas like the north-west which has a high proportion of elderly people, would result in fewer people having to leave their home areas to go into nursing homes, often prematurely.
The development of small schemes in towns and villages would also help to consolidate services in these areas for other elderly people.
The executive director of the ICSH, Mr Donal McManus, said such funding would prove cheaper than paying nursing-home subventions.
He said only a tiny proportion of the 1,200 homes provided nationally last year by the voluntary and co-operative housing sector was high-support sheltered housing.
He was only aware of about six such schemes being built last year.
He said they tend to be built more in urban areas where the greater concentration of population makes projects more viable.
"The challenge is in rural areas to provide small clusters of sheltered housing of five or six units linked into other services.
"But voluntary housing organisations have been unwilling to develop these schemes because there is no revenue funding for staff support," he said.
Mr McManus said that at the moment funding was only provided in an ad hoc way for such services as meals-on-wheels, but what was needed was a defined scheme.
It is Department of the Environment policy to encourage sheltered housing and capital funding of up to 95 per cent is available.
While many housing associations do provide accommodation for the elderly - some 350 units last year - these are not high-support sheltered schemes and do not have full-time care/support workers.
Such sheltered schemes, where services such as cooking and laundry could be provided, would be suitable for people unable to live totally independently but who are not so incapacitated that they need to move into nursing homes.
The ICSH, which represents more than 180 housing associations, has calculated that revenue funding for sheltered housing would be cheaper than the lowest form of subvention for nursing homes.
It has estimated that it would cost €100 per week to keep someone in high-support housing. This would fall to € 30/40 for low-support care for elderly people who are still quite independent.
Discussions have been held with the Department of the Environment on the issue and the ICSH is hopeful a proposal will be put to government.
"If this funding was provided it would dramatically increase the output of sheltered housing for the elderly," Mr McManus said.
There was evidence, particularly along the Border, of elderly people leaving their localities to go into nursing homes in Northern Ireland when sheltered housing would have better met their needs, he said.
In Co Roscommon, the Tulsk Voluntary Housing Association has built a scheme of six houses for the elderly and four family homes close to the centre of the village.
While there is no full-time support worker for the elderly residents, the association, along with Tulsk parish services, also runs a residential rest-care centre on the same site.
The chairman of the association, Father Austin McKeon, said the most important thing provided by the scheme was security.
"From visits to elderly people living alone in the country it emerged that a lot of them were fearful and very lonely - this was in the early 1990s when a lot of old people were being robbed," he said.
Father McKeon said elderly people did not want to leave their home areas and there was still a huge reluctance to go into "the county home".
"Here they are near the church and post office and their neighbours can drop in," he said.
One of the residents, Mrs Maureen Flanagan (79), left the house where she reared seven children in a townland three miles away to move into one of the houses.
She still misses her old home but the new house is more comfortable and convenient.
"You have everything around you and Mass is beside you," she said.
At a recent meeting of housing associations in the Border counties, many representatives also said they were concerned that the housing need for groups such as the elderly and disabled was being "vastly under-represented" by local authorities.
A new housing-needs assessment is due to be carried out by county councils in March and Mr McManus said it was important that health boards and social organisations should play a greater role in assisting local authorities to determine the real need.
The last assessment in 1999 found in Cavan, for example, that there was only one homeless household and no households representing people with disabilities.
In Leitrim, which has a very high proportion of elderly, there were only 27 elderly households identified as being in need of social housing.