A ten per cent cut in council tax benefits ordered by ministers could hit 5,200 claimants in Amber Valley.
The council has been told to save about £850,000 a year which may mean those receiving the benefit – mainly people out of work, on low incomes or the disabled – could have to pay more of their full council tax bill.
Amber Valley has a caseload of 11,000 people, but 5,800 people - like pensioners - are protected from cuts.
A spokesman for the council said: “We are currently working on a plan to make our savings and we are working with councils throughout Derbyshire.”
The council has to produce a strategic report which will be considered by the full council on September 26.
Labour councillor Paul Jones said: “It boils down to the fact that the government has slashed money from our budget. Therefore we have to find that money - but we can’t increase council tax because we’ve already received money not to.
“Or we pay from our own resources but we can’t because we’re skint. Or we find it from members of society who don’t pay the full amount. It’s another case of the disaadvantaged being hit again.”