People relying on benefits are spending a median of $108 for every $100 they receive in weekly income, according to FinCap's 2026 Voices report, released today and published by RNZ.

The report, hosted as a PDF on FinCap's own domain, draws on data from financial mentors and the MoneyTalks helpline across 2025. FinCap is the national body that supports financial mentors and operates MoneyTalks, which provides free support on money matters and connects people with financial mentors and services.

Financial mentors dealt with 30,654 cases in 2025, with the majority involving people who relied solely on benefits. Across all clients, median expenditure was 107 percent of median weekly income — a record deficit in the reporting series. For those receiving income only from a benefit, median expenditure rose to 108 percent of median weekly income.

The median weekly income of financial mentor clients dropped from $765.32 in 2024 to $760.58. Just over 50 percent of clients were relying on benefits, 17 percent received only salary or wages, and the remainder had a mix of incomes. The proportion of clients recorded as receiving part-time salary or wages fell from 20 percent to 16 percent over four years.

Clients directed 38.1 percent of their income to rent or board, 19.5 percent to groceries, and 14.2 percent to debt repayment. Power prices rose approximately 12 percent over the course of 2025, further compressing already tight household budgets.

Total client debt reached $933 million, up 121 percent over five years. Eighty-six percent of mentors reported seeing debt collectors making repayment demands that would stop clients from being able to afford essentials. The previous year's Voices report, published in June 2025, stated that debt collection organisations were using court processes to recover millions of dollars from beneficiaries.

FinCap is calling on the government to license debt collectors and amend the Fair Trading Act to apply penalties for harassment and coercion. Chief executive Fleur Howard leads the organisation.

One in eight clients was seeking a KiwiSaver hardship withdrawal, with mentors reporting they spent 40 percent of their time processing those applications. The amount withdrawn from KiwiSaver for hardship reasons is up 1,046 percent since 2015.

The scale of hardship withdrawals and the time burden they place on mentors points to a system where retirement savings are being depleted to cover immediate living costs — a trend with long-term fiscal implications for superannuation adequacy that sit beyond the report's immediate remit.

MSD's own cost modelling, referenced in a FinCap co-funding paper, estimated the actual cost of one full-time-equivalent financial mentor at $135,000 per annum. An MSD document on a welfare assistance package stated that an upcoming increase to main benefit rates would rise between $2.29 and $6.26 per week compared to the status quo adjustment. MSD's website also indicates Budget 2026 includes faster use of Inland Revenue income data to adjust benefit entitlements.

The gap between those marginal adjustments and the 8 percent structural deficit the Voices report documents is where the political question sits. A benefit increase of $2 to $6 per week against weekly overspend of that magnitude suggests the indexation mechanism, not its calibration, is what FinCap's data effectively calls into question — though the report itself does not frame its findings in those terms.

MSD publishes Benefit Fact Sheets providing breakdowns of overall numbers and trends in benefit receipt. No report matching the FinCap Voices findings on beneficiaries spending more than they earn was found on the MSD government domain. The economist Shamubeel Eaqub, as shared by FinCap on LinkedIn, described financial mentors as "excellent and trustworthy".

For those working in the welfare and financial capability sector, the Voices report is the closest thing to a sector-wide dataset on the gap between income and essential expenditure for people presenting to financial mentors. The 30,654 cases represent those who have already sought help — a cohort that, by definition, excludes people who have not reached a mentor or the MoneyTalks helpline. FinCap's policy asks, particularly on debt collector licensing and Fair Trading Act reform, will likely be tested against the government's broader welfare and consumer law work programme in the coming parliamentary cycle.