Green Party Metiria Turei concedes she could still be charged with fraud after she admitted lying to authorities to keep her benefit.
In her biggest speech of the year, Turei made the extraordinary confession while announcing her party's plans to dramatically reform New Zealand's welfare system.
Speaking at the Green Party AGM in Auckland, she said that as a solo mother on a benefit she did not tell Work and Income NZ that she had extra flatmates who were paying rent.
At a press conference afterwards, Turei said she could still face consequences for her illegal behaviour 24 years ago.
"It is possible that WINZ could do an investigation into my case and I could be charged.
"I personally feel I have a responsibility to tell it how it is, because other people don't have the privileged position that I do."
Asked whether beneficiaries in a similar position should lie to authorities, she neither encouraged nor dissuaded them, saying that it was up to them.
An audience of around 250 people at the AGM were silent as she revealed her story, but nodded along and made encouraging noises, one member saying "ka pai Metiria". She admitted that her admission could hurt her or the party, but said she wanted the Greens to be "defined by our truths", not by lies.
Turei's experience on the DPB was one of the driving forces behind the new "Mending the Safety Net" policy. It goes well beyond changing entitlements, instead aiming to completely transform a culture which Turei said had become punitive and was trapping people in poverty.
The Greens want to lift core benefits by 20 per cent while scrapping all sanctions, including penalties for women who fail to reveal the name of their child's father, or sole parents who want to begin a long-term relationship - promises which prompted a standing ovation from the Green members.
The Greens will also raise the top tax rate while lowering the bottom tax rate, a move which co-leader James Shaw said would mean 97 per cent of New Zealanders earning less than $150,000 would receive $209 more a year.
It comes after National and Labour announced major packages to support low and middle-income earners.
Turei said even Labour's more generous package would not achieve the Greens' ultimate goal - ending poverty in New Zealand. Their policy was based on lifting every person above the official poverty line.
Labour leader Andrew Little said his party would be open to adopting parts of the Green policy, in particular scrapping some of the "perverse" benefit sanctions. On Turei's admission, Little said it was a "brave thing for a politician to do" but he was not worried about any damage to Labour's likely coalition partner.
National Party campaign chair Steven Joyce said Turei's lie was "disappointing" but did not go as far as saying WINZ should pursue the Green co-leader over it. He described the Green policy as a "big backward step".
After delivering a passionate speech about poverty, Turei sheepishly admitted to reporters that she was driving a late-model BMW during the election campaign, while noting that it had been loaned by a friend and ran on electricity.
'Mending the Safety Net' package
• Increase all core benefits cent (Jobseeker Support, Sole Parent Support, Supported Living Payments, Student Allowances) by 20 per cent.
• Reduce the bottom tax rate from 10.5 to 9 per cent for people earning less than $14,000 per year.
• Raise the top tax rate to 40 per cent for people earning more than $150,000 per year.
• Raise the minimum wage from $15.75 to $17.75 in the first year, and eventually to 66 per cent of the average wage.
• Scrap the In Work Tax Credit and create a children's credit for low-income families worth $72 per week
• Lift the amount people can earn to $200 before their benefit is reduced.
What is it worth?
• Single parent not working, two children: $7197 per year ($138.40 more than National Budget package)
• Single parent on student allowance, working part time, two children: $7197 per year ($138.40 more)
• Two parents, one earning $70,000, two children: $2797 per year ($53.78 more)