The Scottish and UK Governments have been urged to work together to increase the uptake of benefits among eligible people.
Holyrood’s Social Security Committee found claims are not made for a variety of reasons, including a lack of awareness, stigma and living in rural areas.
A report published by the committee on Wednesday found up to £20bn of means-tested benefits had been left unclaimed across the UK in 2016-17.
It added the figure could be much higher due to a lack of accurate and comprehensive data on uptake rates.
In 2016, changes to the Scotland Act gave the Scottish Government new powers over benefits, leading to the formation of Social Security Scotland to manage and exercise the new powers.
The agency, which has its headquarters in Dundee, will be given complete control of the social security system in Scotland this year.
The committee concluded a “joint effort” by both Holyrood and Westminster should be adopted to ensure people are receiving payments they are entitled to.
The report said: “The committee recommends that joint working between the UK and Scottish Governments, to consider how best to encourage take-up of all benefits, should be discussed formally between both Governments.”
Currently, the Scottish Government is legally required to create a strategy to ensure maximum uptake but the UK Government has no such statutory duty.
Committee convener Bob Doris described the lack of strategy from Westminster as “deeply alarming”.
He said: “It is simply not good enough that billions in benefits continue to go unclaimed every year.
“It is absolutely vital we get more accurate data on the numbers entitled to benefits so that any communications strategies can be targeted at those in need who are missing out.”
He added: “Data-sharing across Governments and agencies is a key factor in improving take-up rates and we are adamant that GDPR must not be used as an excuse to not share data.
“It’s also crucial that welfare agencies are adequately funded and we are seeking increased and sustained funding for these agencies going forward.
“Our evidence has made it clear that both Governments must do more to work productively together to ensure people receive the benefits they are entitled to and remove any barriers which mean people miss out.”
A spokesman for the Department for Work and Pensions said: “The Scottish Government has significant welfare powers and we remain committed to working closely with them.
“We want everyone to claim what they are entitled to and have a wide range of channels where people can get information and advice, including our Help to Claim service.”
A Scottish Government spokeswoman said: “We are pleased that the committee has recognised the significant work we are doing to encourage people to take up Scottish benefits.
“Our statutory duty to increase take up, our benefit strategy that highlights how we are taking action to remove barriers to applying for benefits, and our £600,000 fund for organisations who support people to apply for Scottish benefits, all show we our commitment to ensuring people can access the financial support they are entitled to.
“We have long shared the concerns of the committee, that the DWP currently has no strategy to increase take up of benefits, and find it unacceptable that the financial support that would really help people in their everyday lives goes unclaimed.
“The UK Government has now recently confirmed that there will be no financial detriment to Scotland if up-take of reserved benefits increases as a result of the work being done to improve take-up in Scotland, and we welcome that as an important step in meeting our aims.”