More than three quarters of people affected by the so-called "bedroom tax" have reduced spending on food since it was introduced, an official analysis found.
A Government-commissioned report into the housing benefit cut for council and social tenants with a spare room found they were comparatively more likely to run out of cash each week.
Only around a third had been successful in accessing hardship funds put in place by the Government to ease the impact of what it calls the "removal of the spare room subsidy".
But fewer than one in ten of those who escaped the regime had done so by moving to a smaller property it showed - which critics said undermined ministers' case for the controversial policy.
Introduced in April 2013, affected tenants can lose up to a quarter of their housing benefit and a string of reports have pointed to an increase in poverty among those affected.
The latest findings are from an in-depth study by Ipsos MORI and the Cambridge Centre for Housing and Planning Research on behalf of the Department for Work and Pensions.
It carried out extensive research over the first 20 months of implementation, involving thousands of tenants as well as landlords, council staff, help groups and charities.
It found 78% of those affected said they ran out of money by the end of the week very or fairly often - compared with 69% of those no longer subject to the reductions.
They were more likely to borrow money to make up the shortfall and 76% said they had had to economise on food bills, 46% on energy, 42% on leisure and 33% on travel.
Less than a quarter (23%) had received Discretionary Housing Payment with a success rate of less than 36% among those applying.
It found however that there had been "no discernible increase in evictions arising".
Only 14.2% of those affected at the start of the policy were no longer subject to the cuts by the end of the research period.
Almost half (46%) put that down to a change in household composition or the ages of children.
One in five had found work or increased their earnings but only 11% had escaped by moving to a smaller council or other social property and 1% had gone into a privately-rented home.
Many cited not wanting to move away from schools as a prime motivation for staying put.
Most councils and social landlords "reported that large numbers of people were unable to move because of a shortage of smaller homes", it said.
Child Poverty Action Group chief executive Alison Garnham, said: "The DWP's own evaluation finds that the 'bedroom tax' is not only pushing families into hardship but it's also failing to free up more accommodation for families, the key argument ministers used to justify this controversial policy.
"The research shows what anyone working with families already knows: the bedroom tax is forcing people to cut back on the basics of living: food, clothing and footwear."
Shadow work and pensions secretary Owen Smith said: "This report yet again shows it isn't just cruel, but doesn't even achieve what it set out to.
"The case for scrapping the bedroom tax is overwhelming, the Tories should learn the lessons from their tax credit U-turn and end this brutal policy."
"It's shameful - especially in the run up to Christmas - that 80% of people hit by the bedroom tax regularly run out of money by the end of the week or month.
"Iain Duncan Smith claimed a 'discretionary' pot of money would be available to help people affected, but this research makes it crystal clear that over 75% who lose out have not received that support.
"How he can continue to stand by this vile policy is beyond me."