An alternative group looking into welfare reform claims Work & Income has become a "menacing and punitive environment" for many beneficiaries.
The Welfare Justice group has issued a report on a series of public meetings it held with beneficiaries around the country.
Chair Mike O'Brien says a move away from personal case managers has led to a loss of respect between Work & Income staff and beneficiaries.
He says many beneficiaries have found the Work & Income climate has become aggressive and intimidating.
Social Development Minister Paula Bennett says change was necessary because 40% of beneficiaries fail to keep appointments and case managers found themselves sitting around.
She says staff are there to help, but they also have rules and regulations to enforce.