Lyons told BBC Radio Ulster’s Evening Extra programme that his officials have assessed that the change in policy will mean 288,000 pensioners are in line for the payment.
“For comparison, across the UK as a whole about 80% of pensioners will retain [the payment], but it’s slightly higher in Northern Ireland because of our lower incomes,” he said.
“This has been a mess from the start. The government have a lot to answer for on this. This has been handled horrifically by the government and has put a lot of worry and concern into the minds of our older people.”
Lyons had secured £17m from Stormont to provide a £100 one-off payment for those affected by the cut last winter.
He said the Labour government’s policy was misguided.
“I said from the start this would not have saved the government a lot of money,” he said.
“What we have seen is a number of pensioners reach out for help and realise they are eligible for pension credit, which is a passport for other benefits. So in that regard it’ll actually cost the government more.”