The government is under pressure to move quickly to let beneficiaries earn more money without being penalised.

Photo: 123rf

Parts of the welfare system have not been updated, with some abatement and eligibility thresholds still at the same levels they were 20 to 30 years ago.

The threshold for how much someone on the jobseeker benefit can earn before their pay is docked has not changed since 1996, while the cash asset levels to claim the accommodation supplement have not shifted since 1988.

Heavenly, who is on the jobseeker benefit and lives in Auckland, said it was tough trying to make ends meet on $290 a week.

"It's hard ... and you don't get much. You're living with what you have to pay for, which is your bedroom you know, food, clothes."

Under the current rules - set in 1996 - people on the jobseeker benefit can earn up to $80 a week.

If they earn more than $80, they are docked at a rate of 70 cents for every dollar earned. Heavenly said the government needs to change that, so young beneficiaries like her can get some experience in employment.

She said young people could not get a foot in the door.

"The government is just you know ... chucking them to the side."

Alan Johnson from the Salvation Army said the abatement threshold acts as a disincentive to work.

Losing 70 cents in every dollar earned, plus costs paying for transport or childcare, meant in some cases it was more costly to go to work than not, he said.

Mr Johnson said the process to get the accommodation supplement could also put people off and the number of people working who received the supplement had slowly fallen.

Photo: RNZ

Children's Commissioner Judge Andrew Becroft said the rules were not helping families trying to get out of poverty.

"We've frozen this in time. I think it's shocking for those who are genuinely trying to get themselves out of hardship and to get a job.

"I think we need to be encouraging them at at least the relative levels that were in place in 1996. To think it hasn't changed in 22 years, it just shows how out of touch the current levels are."

Meanwhile, cash asset levels for working people trying to get the accommodation supplement have not changed since 1988.

Non-beneficiaries can get the full amount only if they have less than $2700 in cash if they are single, or $5400 if they're a couple.

Mr Becroft said that locks out people who might be genuinely saving for a house, but still need a bit of help with their housing costs in the interim.

He said the system was utterly out of kilter and it was one of the reasons people were unable to afford a home and forced to keep renting.

Earlier this week, Social Development Minister Carmel Sepuloni announced the formation of an expert advisory group to review the welfare system.

It will report back to the government in February next year.

Ms Sepuloni said the government may look at making changes in some areas, including abatement thresholds, sooner than that.