Beneficiaries often skipped dental care, doctors' visits and hearing aids due to limited finances, she said.
Other welfare advocates have criticised authorities for unfairly targeting beneficiaries and failing to crack down on more profitable white collar criminals.
A Victoria University tax lecturer last year estimated tax evaders cost the country $1 billion to $6 billion in 2011, while welfare fraud totalled $39 million for the year.
Nearly 18,000 Northland residents were claiming benefits in March, down from 18,133 a year earlier. The number of unemployment benefits dropped from 3647 to 3503 during the 12 months.
Meanwhile, at least six Northlanders have appeared in courts for benefit fraud this year alone.
In February, sickness beneficiary Betty Monica Kingi was remanded on bail after admitting to defrauding Work and Income of more than $66,000.
A 33-year-old Kerikeri woman and a 34-year-old man from rural Kaikohe were sentenced to home detention for welfare fraud totalling more than $150,000. Both individuals, whose cases were unrelated, will have to return the money.
Whangarei couple Edith Rose McKay and Lewis Pak Lim were sentenced to home detention in January after fleecing more than $72,000 by making false statements to get benefits.
And Whangarei cleaner Josephine Lillian Te Tore was sentenced to community detention in relation to social welfare overpayments of more than $18,300.
Nationally, nearly 400 fraudsters were prosecuted between October and March for illegally claiming welfare payments that totalled just over $13.7 million.
Associate Minister for Social Development Chester Borrows said welfare fraud was comparable to any other type of theft.
Mr Borrows said most beneficiaries were law-abiding citizens, with about 300,000 Kiwis receiving benefits.