Benefit numbers fell by 2000 in April to their lowest level since July 2009.
Social Development Minister Paula Bennett said there were now 320,954 people on benefits, which represented around 12 per cent of working age New Zealanders.
Of those, 58,000 were on sickness benefits and 99,000 on the domestic purposes benefit.
The number of people on the unemployment benefit had also fallen and was down to 51,422, the lowest figure since June 2009.
Young people on the unemployment benefit also fell by nearly 1000 to 14,080 in April and had dropped by 9500 since peaking in January 2010.
In the past month more than 2000 young people aged 18 to 24 found work and cancelled benefits, not only unemployment benefits but also sickness and domestic purposes support.
In the past year the number of people in Canterbury on the unemployment benefit had fallen by 30 per cent and total benefit numbers in the region were down by 14 per cent since the February 22 earthquake.
Bennett said every month on average 7000 New Zealanders went off welfare and into work.
However, the Household Labour Force Survey released last week found unemployment rose to 6.7 per cent in the first quarter of the year, up 0.3 in the three months ended March 31.
That was down from a revised 6.4 per cent in the prior quarter and higher than the 6.3 per cent forecast by economists.
At the same time the labour force participation rate rose 0.6 to 68.8 per cent, the second-highest rate on record.
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