As many as 68,000 jobseekers a year have their benefits wrongly withdrawn, driving many to ‘desperate measures’ – a think tank has claimed.

Financial penalties handed down to claimants under the current system are contributing to the rise in people using foodbanks, a report from Policy Exchange has concluded.

Many claimants who breach the terms of their job seeker requirements for the first time receive sanctions that are eventually overturned as much as four weeks later.

‘It is clear that there are a significant number of people who have their benefit taken away from them unfairly. Four weeks without any money is driving people to desperate measures including a reliance on food banks,’ economics and social policy research fellow, and author of the report Guy Miscampbell, said.

The Smarter Sanctions report suggests claimants who breach requirements for the first time should be issued with a ‘yellow card’, credited with their weekly benefit.

Policy Exchange also called for benefits to be withdrawn from repeat offenders for a longer period of time, with each subsequent breach adding 13 weeks to enforced sanctions.

‘The welfare system must have a sharp set of teeth. That is why the sanctions regime is so important,’ Miscampbell said.

‘The welfare system must also come down hard on people who are consistently failing to do all they can to find a job. Fairness is integral to the sanctions system and people must know that if they choose not to play by the rules then they will receive harsher penalties,’ he added.

Responding to the report, a spokesperson for the Department for Work and Pensions said: ‘Every day, Jobcentre Plus advisers are successfully helping people off benefits and into work as part of the Government’s long term plan to build a stronger, more secure economy. We have seen record numbers of people in work – the number of people in a job went up by 193,000 over the last three months and the number of unemployed people fell by 125,000.

‘It's only right that people claiming benefits should do everything they can to find work if they are able. Sanctions are used as a last resort and anyone who disagrees with a decision can appeal.’

Christian leaders last month wrote to David Cameron, blaming the UK’s ‘foodbank crisis’ on government welfare reforms and benefits cutbacks.