"Incredible numbers" of Rotorua beneficiaries are needing extra help to survive financially, a local Salvation Army worker warns.
New statistics from the Ministry of Social Development show 7765 Rotorua residents were receiving benefits at the end of December, 183 more than during the previous quarter, but 140 fewer than in December 2011.
A Salvation Army Rotorua co-ordinator, who wanted to be known only as Shelly, said while she wasn't aware of anyone being kicked off a benefit due to Government reforms, some benefits had been cut in recent months.
"A lot of people, they're not meeting their requirements, and that's where the problem lies.
"They're not turning up to appointments, so they'll have their benefits cut until they do what they have to do - like budgeting, or CVs.
"It's really putting the onus back on the person to help themself as well.
"Incredible numbers" of Rotorua people needed help, she said.
"We've been flat out down here."
Since January 1, 181 Rotorua beneficiaries had come to the Salvation Army for extra assistance, compared with 83 for the same time a year ago.
As of December, 339,095 people nationwide were receiving benefits, up 5.6 per cent on the previous quarter.
However, Social Development Minister Paula Bennett said the number of people on benefits was at its lowest level since 2008.
Beneficiary numbers fell by nearly 12,000 year-on-year.
"But with 339,095 people on benefits in New Zealand, there is much more work to do." New Zealand's unemployment rate at the moment is at 7.3 per cent - the highest level since June 1999.
Green Party co-leader Metiria Turei said a fall in the number of unemployment beneficiaries while unemployment itself was rising raised concerns about whether Government welfare changes were preventing Kiwis getting the help they needed.
"It's unusual that at the same time the number of people who are out of work is rising, the number of people getting unemployment benefits is falling.
"It would be extremely concerning if many people who need help because they have lost their job are not getting help because of National's punitive welfare changes."
Work-testing has been introduced for domestic purposes beneficiaries, as has a raft of new obligations and management of benefits for youth and teenage parents. Further reforms are before the social services committee that simplify the benefit system from seven to three: jobseeker support, sole parent support for parents with children under 14, and supporting living payment for people significantly restricted by sickness.
The bill also requires jobseekers to be drug-free, and requires beneficiaries with children to immunise them and enrol toddlers in early childhood education.
The Treasury and the ministry have estimated that the number of beneficiaries could be cut by between 28,000 and 44,000 by 2016-17, saving between $992 million and $1.6 billion.
A June Cabinet paper released by the Treasury on December 19 said the variations were due to uncertainty of implementation, changes to delivery and eventual design details.
The Government spends $8 billion a year on welfare benefits.
Ms Bennett said in September an estimate based on the expected duration of all current beneficiaries showed the lifetime costs to be $78 billion.
Benefits in Rotorua by the numbers:
December 2012
7765 working-age (18-64 years) recipients of all benefits.
1582 working-age recipients of an unemployment benefit.
3405 working-age recipients of a domestic purposes benefit.
1275 working-age recipients of a sickness benefit.
1208 working-age recipients of an invalid's benefit.
September 2012
7582 working-age recipients of all benefits.
1406 working-age recipients of an unemployment benefit.
3420 working-age recipients of a domestic purposes benefit.
1233 working-age recipients of a sickness benefit.
1203 working-age recipients of an invalid's benefit.
December 2011
7905 working-age recipients of all benefits.
1587 working-age recipients of an unemployment benefit.
Source: Ministry of Social Development