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.

FinCap is the national body for financial mentors — people who help others with money problems for free. It also runs MoneyTalks, a helpline that connects people with mentors and services. The report uses data from mentors and the helpline across 2025 and is hosted as a PDF on FinCap's website.

Financial mentors helped 30,654 people in 2025. Most were on benefits. On average, clients were spending more than they earned — 107 percent of their income across everyone, and 108 percent for those whose only income was a benefit. Think of it like earning $100 but needing to spend $108 to get through the week.

The median weekly income of clients dropped slightly, from $765.32 in 2024 to $760.58. Just over half were on benefits, 17 percent earned only a wage or salary, and the rest had a mix. Fewer clients were earning part-time wages — down from 20 percent to 16 percent over four years.

Clients spent 38.1 percent of their income on rent or board, 19.5 percent on groceries, and 14.2 percent on paying off debt. Power prices rose about 12 percent during 2025, making tight budgets even tighter.

Debt growing fast

Total client debt reached $933 million — up 121 percent over five years. Eighty-six percent of mentors said debt collectors were demanding repayments that left people unable to afford basics like food and power. The previous year's Voices report, published in June 2025, said debt collection agencies were taking beneficiaries to court to recover millions of dollars.

FinCap wants the government to license debt collectors and change the Fair Trading Act to punish harassment and pressure tactics. Chief executive Fleur Howard leads the organisation.

KiwiSaver withdrawals

One in eight clients was applying to take money out of their KiwiSaver — their retirement savings — because of hardship. Mentors said they spent 40 percent of their time helping with these applications. The amount people have withdrawn from KiwiSaver for hardship reasons has gone up 1,046 percent since 2015.

The scale of these withdrawals, and the time they take mentors to process, suggests people are using their retirement savings to cover everyday living costs. That has long-term consequences — if people spend their retirement savings now, they may not have enough when they actually retire.

What the government is doing

MSD's cost modelling, referenced in a FinCap paper, put the cost of one full-time financial mentor at $135,000 per year. An MSD document on a welfare package said an upcoming increase to main benefit rates would add between $2.29 and $6.26 per week. MSD's website also says Budget 2026 includes faster use of Inland Revenue data to adjust benefit payments.

The gap between those small increases and the 8 percent weekly shortfall the report documents is where the political question sits. Adding $2 to $6 a week to a benefit, when someone is already overspending by 8 percent, raises questions about the whole system used to set benefit rates — not just the numbers. The report itself does not put it that way.

MSD publishes Benefit Fact Sheets showing benefit numbers and trends. No report matching FinCap's finding — that people on benefits spend more than they earn — was found on the MSD website. Economist Shamubeel Eaqub, shared by FinCap on LinkedIn, called financial mentors "excellent and trustworthy".

What the data covers

The Voices report is the best available picture of the gap between income and essential costs for people who seek help from financial mentors. The 30,654 cases only include people who already reached out — anyone who has not contacted a mentor or MoneyTalks is not counted. FinCap's requests, especially on licensing debt collectors and changing the Fair Trading Act, will likely be tested against the government's welfare and consumer law plans in the coming parliamentary term.