The Scottish Government would financially support failed asylum seekers if Scotland was handed control over immigration, Social Justice Secretary Alex Neil said.
Mr Neil has attacked the UK Government's proposal to cut financial support for those that are refused asylum in the UK, saying it will leave traumatised men, women and children "destitute".
In a letter to UK Government Immigration Minister James Brokenshire, Mr Neil said: "The proposals will cut support to some of the most vulnerable people in our society, who only receive that support because they would otherwise be destitute.
"The Scottish Government believes that the proposals, which seem designed to shift responsibility and cost onto other bodies, particularly local authorities, are wrong in principle.
"It is highly unlikely they will achieve their objective, and they will fundamentally undermine our efforts to create a fairer Scotland."
He added: "Destitution should never be an outcome of the asylum system.
"When we talk about asylum seekers, we are not talking about objects. We are first and foremost talking about vulnerable people, families, men, women and their children - people who have often been through great trauma and who deserve to be treated fairly and equally and with dignity and respect.
"In Scotland we want to build a fair and equal country that we can all be proud of.
"If we had powers over immigration we would take a humane approach to asylum seekers and refugees in line with our commitment to fairness and equality, and of course upholding human rights.
"We would take action to ensure that asylum seekers do not face destitution and humiliation by implementing a new system of support. We strongly believe that those refused asylum for whatever reason should be treated with fairness and compassion.
"We will continue to do all we can to campaign against these unfair and inhumane proposals."
Gary Christie, head of policy and communications at Scottish Refugee Council, said: "This attack on those whose claims are turned down, including many families already on the breadline, is unfair and dangerous.
"It is unfair because thousands of Home Office decisions on people's asylum claims later turn out to be incorrect. We know that around 30% of appeals against refusals are successful, a huge figure that affects many individuals and families.
"It is also unfair because many people are simply unable to return to their home country. They may be expected to return to a war zone or to a country whose government refuses to accept them.
"The proposal is dangerous as it will force people into abject destitution, leaving them exposed to an increased risk of violence and exploitation on the streets."
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