A mother of six says she was told she would be reported to child protection services if she moved into a motel after being evicted from her home.
Athena, whom the Herald agreed to identify only by her first name, said the threat was punitive, insulting and unfair.
"I pretty much want to sleep in my car instead of going to them for accommodation.
"It's degrading to us as parents. It's like our choice that we wanted to go into a motel. That's the last place we want to live."
The Manuwera woman was sent a 90-day eviction notice on February 13 for her private rental that was paid for through Work and Income. The landlord wanted the house back.
She went to Work and Income the next day to discuss her options. She had bad credit, so finding her own rental was difficult. Athena has been on the Housing NZ waiting list since mid-last year.
A manager explained that if she couldn't find accommodation by May 20 she could get a motel room for herself and her children but Work and Income would have to notify the Ministry for Children - Oranga Tamariki.
Athena asked why, and the manager replied that motels were an unsafe environment for children to be brought up in.
It was unfair that Work and Income provided emergency housing yet couldn't ensure their safety and enforced a notification against the parents, Athena said.
Athena had never had a ministry notification before. The system of notifications can mean that children get removed from their parents. Athena said she was supposed to be high priority on the Housing NZ list and was now looking for a private rental.
Last August, the Ministry of Social Development (MSD) told staff to alert the then Ministry for Vulnerable Children about new clients with dependent children given grants for emergency housing assistance.
The ministry quickly recognised the advice was wrong and retracted it two days later.
Minister for Social Development Carmel Sepuloni has criticised the directive to Athena and ordered an investigation.
She said even though the statement was retracted some people still affected, "and that is disappointing". She believe it could hurt people in vulnerable situations and their ability to ask for essential services.
"I have ordered a timely investigation into this matter to ascertain how this occurred and to ensure the appropriate checks and balances are in place to prevent instances like this from happening again.
"This Government is committed to a fair and accessible welfare system that upholds the respect and dignity of those that need to access it."
Auckland Action Against Poverty spokesman Alastair Russell said the notification issue appeared to be widespread: "It is a further form of harassment dressed up as support.
"They [Government agencies] invest money in harassing parents who are unfortunate enough to be homeless. And homelessness is not an indicator of child abuse, it is an indicator of poverty and social failing by the state."
MSD deputy chief executive Ruth Bound said they regretted giving staff the wrong advice and would assist the investigation.
It was not policy to automatically refer anyone to child protection if they were in emergency accommodation.
"But we do alert Oranga Tamariki if we believe a child is at risk in any way."