At the moment, people on the Jobseeker benefit who are working part-time start having their payments reduced once they earn over $90 a week.
Labour is promising to increase that to $160 a week - and social development spokeswoman Carmel Sepuloni said that would be a big help for many people.
"So many people I've spoken to across the country have said they might be in a position to take up a few more hours of part-time work, but they've been stuck in the unenviable position of being no better off because the threshold for earning while on the benefit is so low."
Child Poverty Action Group economics spokeswoman Susan St John said for those beneficiaries who could get part-time work, it would make a difference.
"But it is not the answer to this deepening recession and it is certainly not the answer to the position that children in the very worst-off families find themselves in and we know that the numbers in those families are increasing."
Labour is also promising to bring back the training incentive allowance, of up to $4500 a year, to help sole parents, the disabled and their carers with extra study costs.
Sepuloni said it would cost $430 million over four years and would be paid for out of the Covid-19 Response and Recovery Fund (CRRF).
With women likely to be the biggest winners from the policy, it made sense, she said.
"Women have been disproportionately impacted with regard to unemployment, so that is part of the Covid response.
"But our intention in the longer term is to keep it in place, but for now that's the appropriate pool of money to draw on."
'Lack of ambition'
St John said while Labour's proposals were welcome, they did not go far enough.
"I think that most of us who can see the problems just getting worse are very disappointed at the lack of ambition and while we could say that any individual policy might be good in its own right, it's just not going to cut it."
Labour's confidence and supply deal with the Greens promised an overhaul of the welfare system.
But Brooke Fiafia from Auckland Action Against Poverty said they were still waiting to see that transformational change.
"Labour isn't committing to [further] increasing core benefits, removing sanctions, or individualising support," she said.
But Sepuloni said the coalition government had made inroads.
"It was never going to be one policy that was going to create a structural change, it is a range of things that creates that structural change: indexation of benefits, lifting benefits, getting rid of some of the punitive sanctions.
"There are a lot of things that have happened already and this builds on that."
Green Party co-leader Marama Davidson wants to go further.
"We're very clear that one of the most urgent changes that needs to be made is a guaranteed minimum income, which will lift the current benefit rates to a level that actually allows people to live with dignity."
National social development spokeswoman Louise Upston said there needed to be a welfare safety net for those who fall on hard times - but people should not be dependent on it.
"A job is better than no job and we've got to make sure that we are connecting people to the jobs available and that the focus is on an economy and businesses where jobs are being created.
"Because at the end of the day, people are way better off in work."
National wants to set clear targets to get people off welfare and into work, and offer cash payments to businesses that hire more staff.
