New Zealand's social welfare system "dehumanises" people in need, with beneficiaries described as "scared stiff" of Work and Income case managers, a report says.

A Canterbury Community Law (CCL) investigation, which looked at access to justice for beneficiaries, said beneficiaries felt they were treated as "non-humans" by Work and Income – not even allowed access to toilets during lengthy waits at offices.

Fear was at a level where people were forgoing entitlements from Work and Income, instead going to non-government organisation's food banks, or the Mayor's Welfare Fund because of previous negative experiences, the report said.

The report is based on 21 interviews with representatives of agencies involved in the benefit system, and 29 interviews with beneficiaries who: had trouble accessing entitlements; had been investigated for benefit fraud; had challenged benefit decisions; or, had used a benefit review or appeal process.

"Beneficiaries are uniformly scared stiff of the department (Work and Income). The department's got the axe above their head . . . they've got huge power over these people, power of the most basic rights, food, clothing and shelter," said an lawyer in the report.

CCL lead researcher Kim Morton said past negative experiences stopped beneficiaries challenging the Ministry of Social Development if their benefit entitlements were turned down.

"This means it is really essential beneficiaries have acess to legal help. It helps to even out an uneven playing field," she said.

Case managers, members of review committees, beneficiaries, advocates and lawyers were interviewed for the research.

Morton said that people interviewed for the research said Work and Income offices gave little privacy.

"Instead they have to discuss often traumatic events in front of a long line of others, then to a different case manager each time, in an open plan office ," she said.

A beneficiary in the report said: "[T]hat whole process where you are not seen as a person . . .we're treated as non-human."

Social Development Minister Anne Tolley said if a toilet was needed urgently, and if a security guard or staff member were available to accompany the beneficiary to facilities, then they could use staff toilets.

Otherwise, they were directed to the nearest public toilets, she said.

Labour deputy leader Annette King said using a toilet in a governmental department office was a "basic right".

"Being able to tell your story in private, away from the ears of strangers, is essential," she said.

The report said case managers were "overstretched".

Tolley said there was "no evidence" of this and in 2014 the Auditor-General reviewed welfare services and found most people found their claims were "resolved fairly".

She said the Government had reduced the amount of people on benefits, with an 8.6 per cent decline in Canterbury of solo parent benefits.

Morton said: "When there is a strong government goal to reduce numbers of beneficiaries, it is even more important that procedures are robust and there are fair processes for reviewing decisions."

Morton said the research showed benefits were inadequate, leaving beneficiaries in a "state of poverty".

A solo parent receives $300.98 after tax, on a benefit, with $120 accommodation supplement.

Ministry of Business Innovation and Employment data said median rents in Christchurch were $418, with lower quartile rents at $285.

Lawyer and co-author of a Child Poverty Action Group paper on welfare, Catriona MacLennan, said benefits needed to be raised to a "liveable standard" to counter the effects of child poverty.

"It is a very intimidating process, it is exhausting dealing with the Ministry - these are people already living in stressful circumstances," she said.

Beneficiaries are sent to budget advisor to access entitlements but told researchers they cannot advise when the benefit amount is inadequate.

King said being on a benefit was often "when people are at their lowest and most vulnerable".

"Taking away their privacy and dignity is an indictment on the Government which should be there to help people get a hand up when it's needed most," she said.