The Social Security Advisory Committee (SSAC) report into young people living independently found that care leavers are the group most likely to have housing problems.
One in five of the 12,000 young people who leave care each year end up homeless within two years, according to the report.
The report also cites a study by Centrepoint that found that more than a quarter of care leavers (26 per cent) had "sofa surfed" and 14 per cent had slept rough, with losing their tenancy a key factor.
Among recommendations to avert housing problems is to raise the cut-off point at which care leavers are exempt from the shared accommodation rate and under-occupancy penalty, from the current level of 22 to 25.
The move is seen as crucial to helping care leavers access and retain one bedroomed private rented homes and two-bedroom accommodation in the social sector.
Raising this age limit for exemption is currently being reviewed as part of the government's Keep on Caring strategy. But the SSAC is urging ministers to make this change quickly to ensure it applies to all care leavers UK-wide.
"Care leavers are a group known to have complex needs who are much less likely to have family support networks than other young people and are more likely to live independently at a young age," states the report.
"Of those aged 19 to 21, at least 60 per cent live independently, compared with 41 per cent of all 19- to 21-year-olds.
"The evidence shows that young care leavers face far greater difficulties than their peers when they move to independent living."
The report also calls for a more joined-up approach to care leaver support across local authorities and benefits agencies.
Currently the Universal Credit computer system does not have a system for flagging up whether a claimant is a care leaver, the report notes.
There are also opportunities being missed for work coaches to work with councils to better co-ordinate support.
Council departments also need to work more closely with each other to ensure care leavers are well supported, says the SSAC.
The report notes that the current system offers conflicting approaches, with council leaving care teams having a statutory duty to help care leavers with housing issues but council tax teams being "aggressive in handling deficit".
"For example, a care leaver may be using a council grant to buy furniture, only for council bailiffs to remove that furniture due to council tax arrears," states the report.
"This can cause ongoing cycles of eviction by one part of the council, followed by efforts to find new social housing from another part."
It adds: "It is crucial that housing stability for care leavers is improved through local authority strategies and through central government action."
The report also calls for Staying Put arrangements, whereby looked-after children in foster provision in England can stay with their carer until the age of 21, to be extended UK-wide.
Councils should also publish their Staying Put strategy so that local authorities can learn from others' successes.
SSAC chair Paul Gray said: "It is understandable why the government has adopted a position that young people in receipt of benefits should face the same choices as other young people who go out to work and cannot yet afford to leave home.
"But it is important not to overlook the fact that many of the young people living independently have not made a choice to do so.
"No one could reasonably argue that those leaving care or at risk of abuse at home should be disadvantaged by the benefit system for circumstances outside of their control. They should be better supported in making their first tentative steps towards a better future."