An Auckland advocacy group wants the government to change housing laws as growing numbers seek hardship assistance from Work and Income.
During the three months to September 2018, more than $100 million was granted to almost 350,000 people.
Much of that was used to buy food or pay rent - basic living costs that in theory should be covered by the jobseekers' or other benefit, rather than a special hardship allowance.
Ricardo Menendez March, of Auckland Action Against Poverty, said it highlights difficulties with the cost of living.
He said the government was failing people on the benefit.
"Compared to people's incomes New Zealand is one of the most expensive places in the world to rent and I do think we should be looking at some of the legislation that other countries have introduced to cool down rent prices and to build more public housing in order for people to not be so effected."