Under the scheme, pensioners are provided with devices which they hang around their neck to call for help if they are distressed.
With attacks on vulnerable elderly around the country on the increase, the alarms are seen as more important than ever.
Eamon Timmins of Age Action told the Herald that personal alarms can play a vital role in giving peace of mind.
"The Government should support people to live independently at home for as long as possible. Pendant alarms provide peace of mind, especially for those who live alone," he said.
Mr Timmins said funding for the scheme stood at €4m a number of years ago but has since been continually cut.
He pointed out that the 96-year-old woman, Margaret Lilly, who was attacked in her Co Donegal home at the weekend and robbed, was able to raise the alarm by pressing a 24-hour panic button.
"She was able to have the alarm raised and get help. It was of great assistance to her," Mr Timmins said.
Fianna Fail's Environment spokesman Barry Cowen said the cut is taking place as "gardai are being taken off the street and more gardai are being told to take a career break".
"I think it's disgusting," he added.
A spokesman for Environment Minister Phil Hogan's department said the changes to the seniors' alert scheme are "regrettable" but are necessary to adhere to its expenditure ceiling for 2013. The cut has been introduced to ensure the "scheme's sustainability and an equitable distribution of funding country-wide".
"Over the last three years the scheme has been funded to the amount of €8.3m, which has enabled 23,686 beneficiaries over that period," the spokesman said.
As a result of the cutbacks, funding will only be available to qualified people over 65 who are living alone.
The department will provide money for the purchase and installation of personal monitored alarms to a maximum of €230 per device. Grants to community and voluntary groups will still be available up to €30,000 a year, he said.
A Dublin community group expressed outrage at the reduction. James McCann (26), chairman of Sallynoggin Neighbourhood Watch, said: "It's a hugely worrying development that a scheme which promotes independent living, saving the State a fortune and protecting older people in their homes, is to see such a massive reduction in resources."