Campaigners warn that a disastrous method of providing benefits to asylum seekers must not be inflicted on claimants
Benefits smartcards will “dehumanise” claimants – in the same way they have asylum seekers, campaigners said.
The Tories want to introduce a system where benefits can only be accessed through a pre-paid card.
Work and pensions secretary Iain Duncan Smith told the recent Conservative Party conference this would only be "paid out in certain shops on certain things" to prevent people buying drink or drugs.
A similar scheme for asylum seekers – called the Azure card – has drawn the wrath of campaigners who said it has increased stigmatisation and hardship.
The Scottish Refugee Council (SRC), as part of Challenge Poverty Week, said a study showed 85% of organisations working with users of the Azure system reported people had gone hungry because the support was inadequate.
Cashless support is dehumanising. This is illustrated by the anxiety and humiliation experienced by people who use the Azure card
It found almost nine out of ten users felt anxious and embarrassed using the card.
People were unable to travel to access legal advice as transport cost was not included in the card's permitted uses.
Almost three quarters had reported poor service from shop staff when using the card, and 85% has said cards had stopped working at some point.
Graham O'Neill, policy officer of the SRC, said in some instances people had to walk for miles to a store that accepted the cards.
He said: "Cashless support is dehumanising. This is illustrated by the anxiety and humiliation experienced by people who use the Azure card, a cashless card for people whose asylum application has been turned down but who are unable to go back to the country they fled.
"We hear story after story from people who have fled horrors we can scarcely imagine overseas, who face destitution here and who then have to face the stigma of using a card that identifies them and their plight."
Peter Kelly, director of the Poverty Alliance, said the experience of asylum seekers showed the card system should not be rolled out to benefit claimants.
He said: "Pre-payment cards not only increase the stigma of being in receipt of benefits but put the blame on the individual.
"The causes of poverty are political. There is no need for poverty to exist and if governments made a real commitment to tackling poverty then millions of people could see their circumstances improve.
"Instead we have seen a punitive regime of welfare reform and more and more people being pushed into poverty.
"Moving to a pre-paid smart card will undermine the dignity and rights of people in receipt of benefits."
Campaigners said there must be a human-rights based approach to benefit payments.
Dee Flanigan, of the Scottish Human Rights Commission, said: "The very existence of poverty represents a failure to fulfil a range of human rights including the right to an adequate standard of living, including adequate food, housing and the right to earn a decent living.
“Those living in Scotland who have direct experience tell us time again that living in poverty is not just about a lack of money but also a lack of power.
"At the commission we believe that the opposite of poverty is not wealth, but rather a society in which everyone is able to live with dignity."