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 in financial difficulty for free. It also runs MoneyTalks, a helpline connecting people with mentors and services. The report draws on data from mentors and the helpline across 2025 and is hosted as a PDF on FinCap's own domain.

Financial mentors handled 30,654 cases in 2025. Most involved people who relied solely on benefits. Across all clients, median spending was 107 percent of median weekly income — a record shortfall in the report's history. For those whose only income was a benefit, median spending rose to 108 percent of income.

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

Clients put 38.1 percent of income toward rent or board, 19.5 percent toward groceries, and 14.2 percent toward debt repayment. Power prices rose about 12 percent during 2025, adding further pressure.

Debt on the rise

Total client debt reached $933 million, up 121 percent over five years. Eighty-six percent of mentors reported debt collectors demanding repayments that left clients unable to afford essentials. The previous year's Voices report, published in June 2025, said debt collection agencies were using court processes to recover millions from beneficiaries.

FinCap wants the government to license debt collectors and amend the Fair Trading Act to penalise harassment and coercion. Chief executive Fleur Howard leads the organisation.

KiwiSaver withdrawals

One in eight clients was applying for a KiwiSaver hardship withdrawal — pulling money out of their retirement savings to cover immediate costs. Mentors said they spent 40 percent of their time processing these applications. Hardship withdrawals from KiwiSaver have risen 1,046 percent since 2015.

The scale of those withdrawals, and the time they take mentors to process, points to people draining their retirement savings to cover day-to-day living costs. That trend has long-term consequences for whether people will have enough saved when they reach retirement age — an issue the report notes but does not explore in depth.

What the government is doing

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

The gap between those small adjustments and the 8 percent structural shortfall the Voices report documents is where the political question sits. A benefit increase of $2 to $6 per week, set against weekly overspend of that size, raises questions about the indexation system itself — the mechanism that determines how benefits are adjusted — rather than simply its calibration. The report does not frame its findings in those terms.

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

What the data covers

The Voices report is the closest thing to a sector-wide dataset on the gap between income and essential spending for people who seek help from financial mentors. The 30,654 cases represent only those who have already reached out — people who have not contacted a mentor or MoneyTalks are not included. 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.