Work and Income has estimated the numbers on benefits will fall by between 28,000 and 44,000 by 2017, with estimated savings of up to $1.6 billion.
Finance Minister Bill English said that the Government was willing to put a significant amount of money into resourcing the reforms, saying it would not only save the state money but get people out of poverty and into work.
"By 2015/16 we will be spending $500 million less on benefits than we anticipated 12 months ago. Part of that is because of increased employment opportunities, but also we believe it is the early effects of changes in welfare."
Ms Bennett said that the reforms would extend work testing from 50,000 currently on the unemployment benefit to 129,000 who would be in the Jobseeker Support category.
The reforms which come into effect in July this year will pool beneficiaries into three broad categories, depending on their ability to work. They include the Jobseeker Support for all those who are considered ready and able to work, Sole Parent Support for those whose children are too young for school, and the Supported Living Payment for the long-term ill or seriously disabled who are unable to work.
It will also introduce a range of penalties for beneficiaries who do not meet job hunting requirements, such as failing a drugs test, and those with arrest warrants.
* $188.6 million over four years for welfare reforms. $174 million of that is new funding.
* This is on top of the $287.5 million in 2012 Budget.
* Employ 354 more Work and Income staff, including 214 'frontline.'
* $16.4 million for the 'Work Bonus' for sole parents who return to work before they are required to.
* Funding to contract out case management of some sole parents/ sick/ disabled beneficiaries to external providers.
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