The Green Party has accused the Government of running a "cruel and deliberate" benefit system that forces desperate people to find work.
"This ignores the fact that people are on benefits because the work simply isn't there, or because they are sole parents, or because they are sick, injured or impaired," MP Sue Bradford said today.
"If Labour has any genuine concern about the deepening poverty of beneficiaries, they must take action in the upcoming budget."
Ms Bradford was commenting on a Ministry of Social Development report, published by the Sunday Star-Times, which showed beneficiaries are worse off in relative terms than they were after National slashed payments in 1991.
Social Development Minister Ruth Dyson reacted by saying beneficiaries were getting more money and support than ever before, and it was misleading to simply compare benefit levels with wages.
"The fact that wages have risen faster than the rate of inflation does not make those on benefits worse off," she said.
Ms Bradford said the report was "damning confirmation that Labour's welfare policies condemn many beneficiaries and their families to a life of debt, deprivation and despair".
It was clear Labour believed the best way to motivate beneficiaries into paid work was to keep benefits so low that people were desperate to find work whatever situation they were in.
"The minister can no longer pretend she doesn't know what is happening when her own department says that many beneficiaries are living far below the Government's own poverty lines," she said.
"Fast rising food, fuel, transport and accommodation costs are now making a bad situation even worse."
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