Thousands of families who claim benefits to top up low wages will lose £300 a year on average when the government cuts their support.
A Wakefield Council report warns that 34,000 working adults in the district will lose money after cuts to tax credits and other benefits by the Tory government.
Struggling families face losing an average of £490 a year in child benefit and tax credits.
A report to the council’s modern public services overview and scrutiny committee said Wakefield would be among English cities hardest hit by the measures by chancellor George Osborne.
It said: “Freezing of working age benefits is likely to impact on over 34,000 working adults in Wakefield currently in receipt of working tax credit.
“Estimates from the House of Commons library indicate that working families will lose up to £490 a year in child benefit and tax credits, with the average amount lost being £300 per household.
“Recent census analysis identified Wakefield as having the third highest percentage of those in work across English cities that are employed in low skill and low wage occupations.”
The government also announced an extension of “right to buy” rules, which previously only applied to council properties, to housing association tenants, leading to fears of a sell off of affordable homes.
More than 20,000 people are on the social housing waiting list in the district.
The report said a third of social housing properties sold to tenants end up as private rental homes, leading to higher housing benefit payments which go to landlords and not the government.
The report said: “It also waits to be seen how government policy will tackle the issue of housing supply in the UK with a need to construct over 200,000 new properties per annum to meet current needs and shortfall in supply.”
Young adults are also likely to be hit hard by the government’s removal of automatic housing support for 18-21 year olds.
The report said the council faced the growing cost of providing homeless support at a time of multi-million pound cuts to local authority budgets.
People aged under 26 make up 37 per cent of hundreds of applications for homelessness support from the council each year.
The report said: “Lack of housing benefit for young people is likely to impact on homelessness support services.”
“There are risks for both care services and for community safety around young people in the district not in employment with no legal access to finance.”