Analysis by the charity shows that support for children seeking protection in the UK can be as little as half of that received through the mainstream benefits system.
It found that, in some cases, children and families would need nearly three times more than they currently receive in order to be pulled out of poverty.
The report states that as a result of the lower levels of payments, many families are not even able to pay for the basics, including clothing, powdered milk and nappies for their babies.
Parents are forced to rely on asylum support to meet their needs because they are generally not permitted to work because of immigration restrictions.
Asylum-seeking children and families are further disadvantaged by lower rates of support for 16- and 17-year-olds than that provided for younger children.
Despite the age group being considered children under domestic and international law as well as under the mainstream benefits system, they are considered as a separate age category for the purposes of asylum support.
There is also no standard additional cash support for families affected by disabilities, as provided by mainstream benefits, which is vital for coping with the additional costs of living with a disability.
Enver Solomon, policy director at The Children’s Society, said: “The support levels for asylum-seeking families is unacceptably low forcing thousands of very vulnerable children to face severe hardship every day, denying them even the basics needed to survive and thrive.
“Children of asylum seekers are no less deserving and have the same needs as all children in the UK, yet by giving them less financial help they are being treated as though they are inferior.
“As the government reviews levels of asylum support, it is vital it takes into account children’s needs and its commitment to tackling child poverty for all children by ensuring asylum support does not put children’s health and wellbeing at risk.”
