Beneficiaries are being kicked out of emergency housing and falling into debt because of bad behaviour.
1 NEWS has obtained figures showing $51 million has been spent putting people in motels, campgrounds, marae and hostels since 2016.
The Ministry of Social Development expects to get $5 million back from the clients its moved on, who verbally and physically abused staff, damaged property and were in possession of illegal drugs.
Auckland Action Against Poverty spokesman Ricardo Menendez said the ministry should be working with those in need of help, rather than making life more difficult.
"We think that's unacceptable. Beneficiaries are already experiencing severe financial hardship and they're being put into debt when all they're seeking is adequate shelter this winter," Mr Menendez said.
Ministry spokesman Scott Gallacher said any decision to recover an Emergency Housing Special Needs Grant is not taken lightly and is only made in exceptional circumstances.
"We take a case by case approach and review the client's situation on a week by week basis.
"Our advice to staff about non-recoverable grants is to look at whether the client has unreasonably contributed to their emergency housing situation," Mr Gallacher said.
The Salvation Army supports the overall policy, saying its working with the number of people in need of help going down.
Welfare National Manager Major Pam Waugh said each year for the past two years the Salvation Army has doubled the number of transitional housing places it has available and other agencies have been increasing their housing availability as well.
She said they have dealt with people who've incurred debt with the Ministry and it's important they're not caught in a debt trap.
"We'd encourage anyone who is struggling with a debt from having to pay back an emergency housing grant to come and see us and we can work with them to address it," Pam Waugh said.
Housing Minister Phil Twyford said while it's an operational matter, for the small number of people that do have to pay the emergency accommodation grant back, "there are good reason."
Mr Twyford has "no plans to change this policy," and National's Judith Collins supports the stance saying it's "only fair".
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