The National Association of Citizens' Advice Bureaux warns that growing numbers of people cannot afford to feed themselves and their children properly, to keep warm and clothed and to pay normal household bills.
Many more are denied loans from the social fund for expensive items or unexpected costs, because their income is so low that they cannot afford the repayments.
The report, launched on Maundy Thursday when the Queen traditionally distributes money to the poor and elderly, adds to the growing research evidence which has highlighted the shortcomings of the benefit system and the resultant hardship.
The association says that claimants are being 'short-changed' by government assurances that they will be better off this year because those on the lowest income will no longer have to pay the 20 per cent contribution to local taxes. Although benefits have risen in line with inflation - by 3.6 per cent - this will not compensate for past changes which have cut their real value, the association says.
In addition, claimants have been told that this year's 'bonus' will go some way to compensating for higher fuel bills expected next year as a result of VAT on fuel.
About 2 million children rely on income support. From 12 April parents with two children under 11 will receive pounds 5.68 a day - or pounds 6.38 in the case of a single parent. 'The same amount will buy approximately two-thirds of a child's shoe, seven-eighths of a packet of nappies, a medium size tin of formula milk or 4 per cent of a basic children's cot,' the report says.
The NACAB cites evidence from its offices around the country that families on income support are left without cooking or heating facilities; that they miss out on meals to cut costs; and that children are going without clothes, shoes, bedding and beds.
The association is calling for an urgent review of the present levels of income support, with a view to removing 'traps' which lock people into claiming benefits in spite of their wish to work or study.
Leading article, page 25