The Council of Christian Social Services says a growing gap between people out of work and those receiving benefits is placing increasing demands on its members.
The latest figures show the number of beneficiaries is down, but unemployment has risen.
Executive director Trevor McGlinchey said his members report a rise in the number of people asking for assistance.
He said this is a sign the welfare net is not stretching as far as it once did, because people now have to face greater demands to qualify for government help.
Mr McGlinchey said social agencies are under considerable pressure to cope and now have to be selective in who they help and restrict services they provide.
He estimates that the number of people seeking help has doubled in the past two-and-a-half years and people that social service agencies have never seen before are starting to come in.
The Salvation Army said it has not seen any reduction in demand for help - and if anything, its workload has increased.
Opposition parties say the latest welfare figures issued by the Government prove people are being forced into poverty.
Social Development Minister Paula Bennett said on Thursday the number of people on benefits dropped by almost 12,000 over the past year to 339,000. However, the latest Household Labour Force Survey shows unemployment has risen.
The Green Party said that proves many people are out of work and not receiving the support they need. Labour agrees the figures will come as cold comfort for job-seekers unable to find work.
Council of Trade Unions economist Bill Rosenberg told Radio New Zealand's Summer Report programme the Government is making it harder for people to receive assistance.
Mr Rosenberg says beneficiaries should be encouraged to seek work, but that does not appear to be the case.