Mansfield District Council had to pay out £110,000 last year to help benefit claimants struggling with housing costs.
Housing charity Shelter said the payments could be vital to stop people losing their homes, but were a "quick fix" for a flawed housing system.
Figures from the Department of Work and Pensions show Mansfield District Council paid £109,900 in discretionary housing payments during the 12 months to March.
Discretionary housing payments are given to people who qualify for either housing benefit or the housing element of the new Universal Credit, and who are struggling with housing costs.
Of the total awarded in Mansfield, £94,000 went to helping people who were in difficulties because of reforms in the welfare system.
The benefit cap alone led to £900 of payouts in Mansfield.
The cap, which was introduced in 2013, limits the total amount of benefits a person can receive to £13,400 per year, or £20,000 for a couple or single parent
A further £900 went to people affected by the benefit cap, which was introduced in 2013 and limits the total amount of benefits a person can receive to £13,400 per year, or £20,000 for a couple or single parent.
In total, 145 'awards', each comprised of multiple payments, were made to claimants during the year, averaging £758 a piece.
The amount spent on discretionary housing payments in Mansfield have increased by 58 per cent since they were introduced in 2013-14.
Public services think tank Reform warned that local authorities were having to plug the gaps in national welfare spending – despite their budgets being hit hard under austerity.
Each year, the Government allocates a set amount of funding to each local authority for discretionary housing payments.
If an authority needs to spend more than this, however, it must dip into its own funds.
Last year, Mansfield District Council spent just 43 per cent of its government allocation.
Across England and Wales, councils paid out almost £151 million during the course of the year.
One in three councils had to spend more than the amount they got from government.
Polly Neate, chief executive of Shelter, said: "Discretionary housing payments are vital in many cases and can be the difference between people losing their home or not – but they shouldn’t be a replacement for a fit-for-purpose welfare system.
“These payments shouldn’t be needed so much in the first place – they’re simply a quick fix to structural problems.
“To solve the underlying crisis for good, the Government must commit to building 3.1 million social homes in the next 20 years, as well as making sure housing benefit is enough to actually cover rents.”
A DWP spokeswoman said the Government spent £23 billion a year helping people in the UK with their housing costs.
She added: "Since 2011, we have provided local authorities with over £1 billion in Discretionary Housing Payments to protect the most vulnerable claimants.
"The allocation of this funding ensures a fair distribution across local authority areas, and is reviewed each year."
Councillor Marion Bradshaw, portfolio holder for housing at Mansfield District Council, said: “We assess every application for a Discretionary housing payments in line with the guidance provided by the Government, and make awards appropriately, taking into account a claimant’s income and expenditure and personal circumstances such as health, household and support needs.
"Each case is individual and any payments are discretionary, and generally only intended as a short term measure to allow a claimant to resolve their position."
"The council also employs specialist financial inclusion officers to support residents with both debt advice and welfare benefits."