Thousands of parents receiving a benefit do not have enough money to meet their children's basic school costs each year.
More than 28,000 loans were provided to families who could not afford to buy school uniforms, stationery, school administration or examination fees in the past financial year, including 1642 payments to struggling Waikato families.
The Government spent $254,221 in school uniform payments to Waikato beneficiaries in the 2013 financial year.
Social Development Minister Paula Bennett says the figures show that sometimes people need a "little extra help" to cover bills, but a leading child poverty advocate says it is indicative of benefits not meeting price increases.
The figures, released to the Waikato Times under the Official Information Act, show the number of advance payments to beneficiaries so that they could cover the cost of sending their child to school dropped dramatically between 2010 and 2012.
Between 2012 and 2013 the number of payments stayed relatively static across all regions, although demand in Auckland and Northland lifted into 2013.
But the convener of the Child Poverty Action Group, Associate Professor Mike O'Brien, said the substantial drop in the number of payments was contrary to most indicators, which suggested need was as strong as ever.
"All the anecdotal and evidential information we have from schools, the health sector [and] from social service providers are all pointing to increased need and pressure on families.
"Yet at the same time the rules are being tightened so that it is becoming more difficult for families to get support and assistance when they need it."
Poverty Action Waikato researcher Rose Black also said the figures were "counter-intuitive" and most likely reflected the Government's policy of reducing the number of people on benefits.
Mr O'Brien said benefits were not meeting price increases, and the demand for school-related costs was another symptom of child poverty in New Zealand. "Overall the consumer price index, in terms of low income households, has had a heavier impact than the general CPI has had."
But Ms Bennett played down rising costs in relation to benefits and said that sometimes, when several bills came at once, people just needed a little extra help.
"The National Government introduced legislation to ensure the benefit increases every year with the cost of living and while no one says it's easy living on a benefit, the majority of people do manage to live within their means."
In Waikato, the total amount paid for school-related costs dropped by a quarter, to $301, 404.
The overall amount spent on hardship assistance (which includes advanced payments, special needs grants and recoverable assistance programme payments) was reduced by $23.4 million between 2009 and 2012.
Work and Income deputy chief executive Debbie Power said the reduction in funding came as a result of the Government's Future Focus benefit changes introduced in 2010.
However, she said the change correlated with a drop in the number of applications received over the same period.
Advance payments on benefits are available to beneficiaries who require a one-off payment to cover an immediate need or essential item. It is then paid back through benefit deductions.
The highest single advance payment for school-related costs in the past three financial years was $1896 to a beneficiary in Taranaki. It paid for school uniforms, school shoes and stationery for seven children.
- Waikato Times