Some beneficiaries are set to lose more than $60 from their weekly pay next month, despite demand for food banks and emergency assistance being at record levels.
The government doubled the winter energy payment this year to soften Covid-19's economic hit, but it will run out on 1 October.
Research from the Child Action Poverty Group shows incomes for all households receiving benefits and/or superannuation will drop by $63 a week for families and couples, and $41 a week for single adults.
The weekly income for a sole parent with one child renting in a low income suburb in Auckland is $25 below the poverty line, next month that will drop to $90.
Ōtara local Agnes said benefit rates were impossible to live on - and while the Winter Energy Payment had given her some reprieve over the past four months, it still was not enough.
"The Winter Energy Payment needs to be extended, especially with the Covid pandemic happening at the moment - the government - and especially our minister of finance and our minister for social development - should see the struggles that everyone is living in at the moment and start giving a damn about us and the people."
The Child Poverty Action Group (CPAG) and Auckland Action Against Poverty are both backing Agnes' call - CPAG researcher Janet McAllister said the payment had not doubled this year because of winter energy, but because of Covid.
"Most of our financially vulnerable families with children, they already don't have enough money and come the first of October their income is going to fall off a cliff - $63 a week for families who have very little is a massive amount to be missing."
Foodbanks are reporting record demand and the number of beneficiaries had its biggest jump in 24 years in April.
The chair of the government's own Welfare Expert Advisory Group, Cindy Kiro, said the welfare system simply wasn't working.
"I don't think there can be any doubt that when people are willing to sacrifice their dignity by waiting in a queue for hours and hours, there's something wrong."
She said while boosting the winter energy payment was not the complete answer, it was a start.
"Whatever justification you want to use people to pay people who desperately need more money, more money is fine by me - you can call it a Covid wage extension, you can call it a Covid hardship extension - you can call it a 'summer' winter payment - I don't care what you call it."
Social Development Minister Carmel Sepuloni said there were no plans to keep the money going - but it wasn't the only boost beneficiaries had received as part of the government's $5 billion families package.
"We have indexed benefits to wages which will see them increase - we increased benefits, we introduced the best start payment and a range of other things ... just looking at sole parents on the benefit - compared to when we got into government about 85,000 sole parents are about $101 better off than what they were when we first took office."
Agnes said those initiatives were not enough - and she warned the dire need for the basics would only get worse in a month's time.
"If they think things are bad now with people asking for emergency assistance, such as food grants, and also people getting assistance from food banks - imagine what it's going to be like when the Winter Energy Payment stops."