The Government was on track to achieve its child poverty reduction targets - at least before Covid-19 struck.
But the pandemic - and the relatively high number of New Zealand children still in poverty - means "bold action" is needed to prevent hardship from getting worse, the Children's Commissioner says.
The latest Child Poverty Monitor released today shows that 235,400 New Zealand children, or one in five, were in households below the poverty line in the year to June 2019.
This meant their households earned less than 50 per cent of the median income after paying mortgage or rent bills. There were 18,400 fewer children in this category compared to the previous year.
The number of children in material hardship - unable to afford six or more basic essential costs like a pair of shoes or a GP visit - was similar to the previous year.
Children's Commissioner Andrew Becroft said the country was roughly on track to meet the Government's 2021 child poverty targets, which Prime Minister Jacinda Ardern is responsible for.
But the findings pre-dated the Covid-19 pandemic, which was expected to increase child poverty rates and worsen the situations of households who were already in hardship.
"Whether Covid-19 worsens outcomes for tamariki depends entirely on how Government and all of us respond," Becroft said.
"Covid-19 must be the reason to do more for our tamariki, not an excuse to do less".
Becroft made three main recommendations - lifting benefit levels, building more social housing, and helping families meet immediate needs - possibly by expanding food in schools further and extending free medical care from under-14s to under-18s.
Robyn Scott, executive director of the J R McKenzie Trust - which co-founded the Child Poverty Monitor - said the private sector also had a role in alleviating poverty.
"Business also needs to play a part with better pay and conditions, and opportunities for people to develop," she said.
Ardern has ruled out lifting benefits further for now, despite intense pressure from NGOs and charities which say welfare levels - around $250 a week for a single person older than 25 - trap families in poverty.
Her Government is aiming to build 12,400 state houses by 2025, though that was still not enough to address soaring demand.
The commissioners' recommendations were over and above the changes the Government was already making in these areas. The Coalition Government lifted core benefits by $25 a week last year, indexed welfare payments to wages (worth $17 a week more by 2023) and made it easier for working families to get a $72 tax credit. It will also allow beneficiaries to earn more next year before they are penalised.
That was short of the recommendation of the Welfare Expert Advisory Group in 2018, which wanted an immediate increase of core benefits of up to 50 per cent.
The Child Poverty Monitor is a partnership between the trust, the Children's Commissioner and the University of Otago.