Almost 60,000 parents are to be affected by delays in the processing of applications for the back-to-school clothing allowance.
The HSE has been forced to employ extra staff to deal with the unprecedented demand for the allowance and it is now likely payments will be late and it could be October before the backlog is dealt with.
There has been a 20% rise in applications this year compared to 2008.
A spokesman for the HSE said: "We have received 133,000 claims under the Back to School Clothing and Footwear Scheme. Staff have processed 75,763 claims and are currently working on the remaining 57,237 claims."
The spokesman said the figure is "being reduced substantially on a daily basis. The efforts of the HSE staff are to be commended with record numbers of claims being dealt with in a minimum delay to the public."
However, it takes between five and six weeks to process an application, prompting fears of late payments well into October.
Payments of over €32m have already been made under the scheme with the average payment amounting to €502.
The figures, which date to 7 August, have renewed worry about the rising pressure on parents this September, with Barnardos' director of advocacy Norah Gibbons saying parents are now turning to illegal money lenders to bridge the gap.
"The cost of sending a child back to school is big enough as it is and this delay is going to put even more pressure on parents who cannot afford to wait to buy uniforms.
"Given the nature of the amount of applications waiting to be processed, we expect to see parents enduring a wait of well into October, and in the meantime turning to illegal lenders, which is one of the worst things they can do," she said.
Gibbons said the delay will also have an effect on the mentality of children when they return to school without a new set of clothing.
"This will put huge pressure on kids going back to school when they are seen to be in last year's shabby uniform. The HSE is doing their best, but it is still unacceptable."
Despite the back-log, the HSE says the scheme is operating well across the country.
"The HSE is very conscious of the increasing demands being made on the service due to the economic downturn and in this regard, the additional staff resource has ensured that the scheme is working well across the country."