In the quarter to June, 354,744 people were on a benefit.
This was down from 365,937 in the quarter to March, and from a post-Covid peak of 389,500 in the quarter to December.
In the quarter to March 2020, around the time of New Zealand's first and most severe lockdown started, total benefit numbers were 309,996, including 151,746 on Jobseeker.
Jobseeker numbers since the peak have fallen about 10,000 each quarter from 212,468 in December.
Sepuloni said most of this fall came on the back of a "big month for people moving off a benefit and into employment".
Overall 42,864 came off a Jobseeker benefit in the quarter, with 31,245 having found work - the second highest number of people finding work since records began, Sepuloni said.
This drop was countered by 33,069 people coming on to a Jobseeker benefit during the quarter.
"The size of the fall over the June quarter is a significant milestone in our recovery from Covid-19."
Sepuloni said the figures included nearly 10,000 people who had been receiving a benefit for more than a year finding work in the June quarter.
She attributed programmes including Flexi-Wage, which has placed 4782 people into employment since it was expanded in February; Apprenticeship Boost, which now has supported 30,031 people into a trade; and the Mayor's Taskforce for Jobs, with 1326 sustainable full-time jobs created.
Since Budget 2019 the Government had invested in 263 new frontline staff to help people into work, $150m in Budget 2020 to help people into work, $99m in work-focused case management and services in Budget 2021, and $86m to sustain additional frontline work focused staff employed through Covid-19.
Upston said the Government was not moving fast enough to help people back into work.
"When in Opposition, social development spokesperson Jacinda Ardern lectured the-then National Government when 29,000 more people were on an unemployment benefit after the Global Financial Crisis.
"Today there are almost 70,000 more people on Jobseeker compared to when Labour came to office.
"Today's figure represents a 57 per cent increase in the number of New Zealanders who have been left behind by Labour to languish on a benefit.
"Billions of dollars have been poured into initiatives the Government claimed would rapidly save and create jobs. A year has passed now, plenty of time for these initiatives to get off the ground, but the jobs Kiwis are desperate for just aren't there."
Upston said young people, Māori and Pasifika were disproportionately affected, 26,000 more Māori, 8000 more Pasifika and 16,000 more 18-24-year-olds on Jobseeker than when Labour came into office.
"By failing to deliver the jobs it promised, the Labour Government is hurting Kiwis and their families."
