The SRC said 60% of the destitute had had their asylum claim rejected
More than half of asylum seekers and refugees using advice services in Scotland are destitute, according to a report by the Scottish Refugee Council.
A survey of 569 people using the services in Glasgow in October 2008 showed 52% were classed as destitute.
This meant they had no state benefits or support, and were either living on the street or staying with friends.
UK immigration minister Phil Woolas said no person need be destitute "while they have a valid reason to be here."
A previous survey in 2007 indicated a destitution rate of about 36%.
That research, conducted in November and December 2007, surveyed 1,235 people who visited the Scottish Refugee Council's offices and found 442 to be living in poverty.
Although the 2007 survey covered a larger number of people, the SRC said the 52% destitution rate in the 2008 survey was more representative as two more organisations in Glasgow were sampled.
Glasgow is designated by the Home Office as a city to which asylum seekers can disperse while their asylum claim is processed.
The SRC survey also shows 82 out of 84 visitors to Positive Action for Housing, a charity for asylum seekers in Glasgow, were destitute.
More than half of them (55%) had been homeless and without living support for more than six months.
The SRC said some of those reported as destitute were entitled to support but were failed by "administrative failures in the asylum system".
It said delays in successful asylum claimants being granted paperwork which would allow them to work and receive state income support, and delays in processing Section 4 claims, were to blame.
Asylum seekers can claim Section 4 support if they have exhausted their right to appeal for permission to remain in the UK, are destitute, and qualify under one of a number of criteria, such as proving they are taking steps to return to their country of origin.
Section 4 support takes the form of accommodation and supermarket vouchers.
Individuals who have been refused asylum represent 60% of the destitute group, the SRC said.
Mr Woolas said: "If someone has no right to be here they must return home. I do not believe the taxpayer should be funding those with no grounds to stay in the UK.
"Our policies ensure that no person who has sought protection need be destitute whilst they have a valid reason to be here - everyone is entitled to apply for support at every stage of the process."
The SRC said most of those living in poverty were from a small number of countries, including Zimbabwe, Iraq, Iran and Eritrea.
John Wilkes, chief executive of the Scottish Refugee Council, said: "The number of destitute people coming to us for help continues to be harrowing, despite similar evidence last year as well as a wealth of reports on the matter from ourselves and other refugee agencies.
"There are many ways the UK Border Agency can help alleviate this desperation - by allowing asylum seekers at any stage of their claim the right to work, or by streamlining the process so that benefits get to the claimant on time.
"We would also demand that families with children receive support whether their claim to asylum has been accepted or not.
"Many asylum seekers and refugees want to return home when it is safe for them to do so. Until then, under no circumstances should we be leaving people to starve on our streets."