A homeless charity could close down if a council proposal to cut funds goes ahead, a spokesman said.
Canterbury City Council wants to limit weekly rent allowance for the Scrine Foundation to £65 per person, from its current average of about £177.
Scrine, which gives beds to 154 homeless people, said the proposal would cost it about £900,000 annually.
But a council spokeswoman said it had to decide if Scrine was eligible to receive the payments.
"Housing benefit is about the eligibility of costs and whether they are actually okay to receive housing benefits.
"My benefit colleagues are questioning that at the moment," said Velia Coffey of Canterbury City Council.
James Walker of Scrine said the charity's situation was "catastrophic" and the cuts would cause it to close.
"The revenue from our clients' housing benefit is our main income stream. We don't have any other liquid assets," he said.
But Ms Coffey said: "It's the rate of it we are questioning, the level of service that's being provided is something that's being determined by Scrine, not the city council."
Scrine rents 23 properties from commercial landlords around Canterbury and owns a 20-bed shelter at Palmer House in Station Road East.
It offers 154 beds and employs 47 full-time staff, and 20 part-time, and currently houses 138 homeless people.