The Salvation Army is facing a "wobbly" future and the loss of more than 20 budget advisers when a temporary government fund runs dry.
The Community Response Fund, introduced in 2008 to help social service organisations deal with recession-related demand, is due to run out in July.
It comes amid revelations that nearly half of New Zealanders live from one pay cheque to the next, and an increase in white-collar workers and homeowners reaching out for financial help.
Changes to eligibility for Work and Income hardship payments in September 2010 mean families now need to show they have received budgeting advice before being given more than three special needs grants in a year.
It was demands like this that Salvation Army social services secretary Pam Waugh said put pressure on already strained social services.
The Salvation Army launched its week-long annual Red Shield Appeal yesterday - two months before it loses the financial support of the response fund.
It has received $2.6 million from the fund since it was introduced in 2008, which enabled it to provide an extra 20 budget advisers to cover a 230 per cent increase in demand since the recession began.
Budgeting advisers worked to get families self-sufficient and no longer reliant on handouts and social welfare. There are currently 50 nationwide, including 10 in Wellington.
Mrs Waugh said that while the charity was "not ungrateful" for the money it had received so far, the numbers of people needing support had not diminished since the recession began.
While the country's economy may be improving, the long-term effects on families were not.
"We always knew that the fund would go and that it was only short-term but we didn't expect that the effect of the recession on the most vulnerable people in society would carry on a lot longer. It is a concern for all of us.
"We want to maintain our services and we want to be effective." And the Salvation Army wanted to continue offering jobs to its "very dedicated", hard-working staff.
"Four social workers and 10 budgeting advisers had already been laid off, and the Salvation Army was relying on this week's street appeal to ensure it lost no more. "July is looking wobbly for some centres."
Social Development Minister Paula Bennett told the Dominion Post that while the fund was only ever temporary to get organisations through the recession, she was aware of the current pressures and would be "making an announcement about budgeting services shortly".
"We think organisations like the Salvation Army do an outstanding job providing services in the community and the Government has a role to play alongside them."
Labour social development spokesperson Jacinda Ardern said the effects of the recession, and of Government policies, were still having a huge effect on demand.
"This should have been anticipated by the minister when changes she has made now require many Work and Income clients to seek budget advice before they can access assistance.
"We simply cannot afford to lose services like those provided by the Salvation Army.
"Given the minister's role in all of this, it's her turn to step up," Ms Ardern said.
A Canstar banking survey last week found from a poll of 2240 people, 44 per cent were living "payday to payday".
Agencies dealing with those in financial stress reported it getting worse, with a growing crowd of white-collar workers and homeowners reaching out for help.
- The Dominion Post