Three quarters of families who live near the Government's planned high speed rail link and applied for hardship compensation have been rejected, figures showed.
The Government was criticised by residents and a pressure group opposing the project for offering help "to virtually nobody".
Of 455 applications, 299 have been refused, 113 accepted, and the rest are being considered.
Hilary Wharf, director of HS2 Action Alliance said: "The rules of the exceptional hardship scheme are being drawn far too tightly. "This is a compensation scheme that the evidence shows is simply not fit for purpose. It offers compensation to virtually nobody and this is despite the hundreds of thousands of homes blighted, many rendered unsellable, with only a tiny fraction of people qualifying for the scheme.
"HS2 is causing enormous stress and worry as it destroys the value of people's homes and wrecks the plans that they have made for themselves. "Government talk of generosity is a cynical misrepresentation of the reality that they don't care."
The hardship scheme requires applicants to prove a pressing need to move. Richard Buist, 41, and his wife Anna, 39, spent #695,000 on a farmhouse at Weeford, Staffordshire in the hope of raising a family.
Mrs Buist, a nurse, suffered a miscarriage five months after undergoing IVF treatment, and the couple resigned themselves to not being able to have children. So the couple wanted to move to a smaller home and escape the pain of the "constant reminder of the house that we can't have a family", said Mr Buist, the managing director of an engineering firm.
They have been trying to sell the house for two years but purchasers are put off by the impact of the HS2 link which is 350 yards away. One criterion for compensation is a change in family circumstances, said the businessman.
"If our situation is not a change in family circumstances, I don't know what it is," he said. The rejection of their application has taken its toll on the couple.
Mr Buist is on anti-depressants and medication to help him sleep. He said: "We submitted the application and Anna put in a very heartfelt and very detailed letter explaining all the circumstances, which wasn't easy. "Anna had a life-threatening situation as well with it, losing a lot of blood.
"They said they sympathised with us but we haven't got enough evidence of our state of mind. "It's bad enough that we moved here to have a family and we can't do that, but we are stuck here."
The Government says the compensation scheme is for exceptional hardship and is currently only open to people affected by the HS2 route from London to Birmingham.
The scheme will also open to those in phase two, from Birmingham to Leeds and Manchester but is currently in a consultation phase. Officials said the scheme goes over and beyond what the Government has to do - and a longer term compensation scheme will also be looked at later in the year.
Transport Minister Simon Burns said: "The Exceptional Hardship Scheme (EHS) is working well - so far there have been 113 successful applications and we have already spent over #48 million purchasing 81 homes along the first phase of the route between London and Birmingham at their full un-blighted market value.
"The scheme's criteria is clear, but we are applying this in a flexible and compassionate way. "However, the EHS is not designed to address the needs of property owners who are not facing exceptional hardship and it is not designed to support the normal operation of local property markets.
"Later this year we will be conducting a consultation on long-term compensation options and we encourage people to take part fully. "In the meantime property owners affected by the railway proposals should contact HS2 Ltd for advice."