Universal Credit should be made more generous to help people hit hard by Brexit, a Liberal Democrat peer has said.
The Government's flagship welfare reform involves rolling six means-tested working age benefits into one payment.
Lord Kirkwood of Kirkhope suggested thresholds and taper rates used to calculate how much money claimants receive should be changed to reflect the "detrimental" impact of the UK's divorce from the European Union as he also raised concerns about tough sanctions.
Speaking during a debate on the roll out of Universal Credit, Lord Kirkwood said: "Sanctions are essential to the proper prosecution of this policy but they have to be appropriately applied.
"A gentle nudge is a work incentive, a sledgehammer sanction actually is counter productive and it costs the public purse more in the long run.
"Finally, I think that I would have looked differently on the 2012 (Welfare Reform) Act if I knew that we were withdrawing from the European Union.
"That will be detrimental to the poor in this country and we have got to find the resources to make more generous the thresholds and the tapers in future."
Chancellor Philip Hammond announced at the Autumn Statement a reduction in the Universal Credit (UC) taper rate from 65% to 63% which will allow workers to keep more of their benefits while they earn.
But the Bishop of St Albans said the Government needed to go further.
He said: "It seems successive cuts to the welfare budget have been prioritised as an easy way of balancing the Government's finances.
"The Chancellor's decision to lower the taper rate of Universal Credit in the Autumn Statement indicates a welcome change in the direction of travel.
"But that concession I believe does not go far enough.
"It is cuts to work allowances that have most seriously undermined universal credit as an effective incentive to increase working hours.
"Only a restoration of those work allowances will see the credibility of universal credit restored."
Peers on both sides of the House used the debate to pay tribute to Lord Freud, the Conservative frontbencher and architect of Universal Credit, who is set to retire from the government.