Immigration New Zealand's "frivolous" issuing of work-to-residence visas is being questioned by migrant support groups as the country's unemployment rate hits new highs.

The agency issued 2261 work-to-residence visas and permits last year despite 44 per cent of those immigrants already here on such visas failing to find employment.

Immigration New Zealand says the scheme allows people who want to live in New Zealand to test their skills against the local labour market, and they know that if they cannot find work they will have to leave.

But Agnes Granada of the Migrant Action Trust said the system was frivolous and totally irresponsible because it was destroying people's lives.

"The work-to-residence permit is not a straight work permit, and migrants come here on the promise of permanency once they can get employment - but when there are no jobs for them, it becomes a trap."

New Zealand's unemployment rate is 6.5 per cent and figures released last week showed the number of people on the unemployment benefit rose 13 per cent last month to 66,328.

"Would-be migrants who have been issued visas are given three months to arrive in New Zealand to start their job hunt, but where can they find work at a time like this?" said Ms Granada.

Many migrants had sold up everything to come here and found that they had no money to return home and so extended their stay here as visitors, students or overstayers.

"Many come with their families, including young children, and find themselves in a situation where they cannot afford to send their kids to school," she said.

Immigration New Zealand approved 382 applications from migrants successful in obtaining a skilled job offer, but declined 299 others who failed to find skilled work.

Dennis Maga, national co-ordinator for Migrante Aotearoa, a migrant workers' union, said the work-to-residence scheme was fuelling xenophobia among New Zealand workers.

"Kiwis already have the perception that they have to compete with migrants for work and this scheme is only turning that perception into truth," Mr Maga said.

"With a deadline to find employment, it becomes like an amazing race for jobs to these migrants, but it is mission impossible for many and it will just end in shattered dreams."

Migrante Aotearoa was also questioning the recruitment of more migrant workers under the Silver Fern Visa when those already here were unable to find work, and would be asking the Department of Labour to investigate whether the work-to-residence scheme had benefited New Zealand in any way, Mr Maga said.

Immigration New Zealand said the work-to-residence permit was issued for nine months. "They must find skilled employment in order to progress through to residence. If they do not, they are not eligible for residence," said an agency spokesman.

"Everyone offered a work-to-residence permit receives a letter explaining these conditions."