An advocacy service helping beneficiaries, believed to be the only one of its kind in Auckland, may have to shut after running for 22 years, following a cut in government funding.

Until a funding policy change last year, the Beneficiaries Advocacy and Information Service had been receiving $50,000 from the Ministry of Social Development to provide independent information and advocacy to beneficiaries and low-income people.

Labour's spokeswoman for social development, Jacinda Ardern, said the service, which handles about 3000 calls a year did vital work for some of the most vulnerable members of society.

"As well as dealing with the face-to-face needs of people from across Auckland, it provides advice to people who don't know how to access help and steps in when Work and Income gets it wrong," she said.

Miss Ardern said the number of solo parents and invalids going on the benefit had hit record highs under Social Development Minister Paula Bennett's watch, at a time when unemployment was close to 10 per cent.

"People need this service now more than ever," she said.

Service manager Karen Pattie said the service needed about $100,000 annually and would cease operations within three weeks without further funding.

Ms Pattie said the service, which currently served 400 clients, had been one of the victims in the Government's decision to cut funding for agencies providing advocacy work.

The push was now for the work to be delivered through Work and Income staff and ensuring beneficiaries were "accountable" for receiving their benefits.

"We provide a much needed support for those who don't understand the system and their rights," she said.

"Many have also moved from the unemployment benefit to rely on the sickness benefit and mental health after facing bullying and threats from their case managers."

Service advocate Kaz Keys, who is also a counsellor, said those who approached the service often had low self-esteem and needed a "guiding hand".

She said many were struggling to cope on their benefit and some saw themselves as failures in society.

"We can say for certain we have managed to help at least three people from taking their own lives," Ms Keys said.

A Human Rights Commission survey last month revealed that beneficiaries had overtaken Asians as the group most discriminated against in New Zealand.

Ms Keys said the recent welfare reforms had turned many people against beneficiaries, making them even more vulnerable.

A 51-year-old migrant who was diagnosed with cancer two years after he moved to New Zealand in 2008, said he would have been at a total loss without the service.

"I was running out of my own savings and was deeply depressed," he said.

"I was fortunate to have been helped by the advocates to access the sickness benefit by people who did not make me feel like I was just taking advantage of the system."

The man was still receiving support and said he "wouldn't know where to go" should the service cease.

Ms Bennett said yesterday that the number of people on the domestic purposes benefit, invalid benefit and unemployment benefit had fallen last year.

Those receiving the DPB, at 95,137, were down from 100,266 from December 2011, and the number of 18- to 24-year-olds on the unemployment benefit had dropped from 21,576 to 15,858.

By Lincoln Tan Email Lincoln