The Ministry of Social Development is refusing to enforce harsh sanctions on beneficiaries who fail drug tests, and the Government is acknowledging the drug sanctions stigmatise the unemployed.
Viv Rickards is the Ministry's new deputy chief executive and he says imposing sanctions on people who fail drug tests just doesn’t make sense.
"For normal New Zealanders, they'll think we can stop their benefit - of course we can.
"But that's not our mode of approach, that's not our operating model, because doing that doesn't help people become employed and independent," Mr Rickards told 1 NEWS.
The Drug Foundation's executive director Ross Bell said that's an astonishing thing for the Ministry to say, but agrees wholeheartedly.
"If the sanctions regime isn't being used and the testing regime doesn't work - then lets scrap it."
The Greens social development spokesperson Jan Logie says her party wants them gone.
"They destabilise families trying to get by and that's not helpful for any of us.
"This was actually more about trying to stigmatize beneficiaries as lazy pot smokers than it was addressing any real issue."
Sanctions for failing drug tests were introduced by the former National Government in 2013 - and at that time it was estimated thousands of unemployed New Zealanders would fail the tests.
However, that hasn't occurred.
"You know we've had over 40,000 (47,115 last year) people going towards jobs where people require drug testing and out of that we've only had 170 people have come back where they've failed the drugs test," Mr Rickard said.
An advocate for Auckland Action Against Poverty, Ricardo Menendez March wants the drug sanctions axed.
"A lot of money is going into this fear-mongering atmosphere when really this money should be going into funding addiction support services."
The Social Development Minister Carmel Sepuloni says the drug sanctions have a negative impact on the unemployed.
"I agree they're stigmatising but I guess it's a hangover from the previous government that was trying to look like they were coming down hard on beneficiaries."
But National's deputy leader Paula Bennett believes new drug testing technology needs to be investigated.
"The way that we originally did that drug testing years ago was controversial it's not something that you do easily.
"Actually it's easy to test for marijuana, it's hard to test for meth, I think it is something that needs to be revisited."