A new report by the Wales Centre for Public Policy suggests "early intervention" is needed to help households avoid debt.
The recommendations come as the Centre warns of "large increases" to council tax rates expected in the coming year. The report highlights the importance of building "personalised and proactive support" rather than a "one-size-fits-all approach".
ONS figures estimate 5.2% of households in Wales have problems with debt, with a greater number of them in arrears for their council tax or social housing rents than in previous years.
Households in Wales have debt problems. (Source: ONS)
The new Wales Centre for Public Policy report outlines the key features of an effective support system:
Building trust with citizens right when they start being responsible for paying council tax or social rents
Identifying any problems and acting on them as early as possible
Easing the process of referring people in debt into partner services, and improved access to independent specialist help
But report authors are warning that the ability for councils and housing associations to respond to future increases in demand could be hampered by increased work pressures.
The Wales Centre for Public Policy said they hope councils and landlords will be able to "learn from" the report.
While council tax rises of the scale proposed by many Welsh councils this year may well be unavoidable, much more can be done to support those most at risk of falling into debt as a result of larger bills. Some councils are already doing good work, but the advice and support on offer across Wales is too inconsistent. Councils should be learning from each other and striving to improve the way they support those vulnerable to debt.
Dr Worthington added, however that:
"The unanswered question is whether they're even able to commit extra resource to this at a time when budgets are being further squeezed".