Putting further sanctions on young beneficiaries who use drugs could push them from cannabis to methamphetamine because it's harder to detect, the Drug Foundation warns.
The National Party yesterday announced a $72 million four-year plan to increase support for unemployed young people.
Money would be put towards guaranteeing work experience for people under 25 on the jobseekers' benefit. They would also be offered help if drug use was preventing employment.
But if an under-25 year old, with no children, refused to do work experience and training or continued to fail drug tests their benefit would be halved after four weeks of not meeting obligations.
Drug Foundation executive director Ross Bell said that risked unintended consequences.
"Drug testing can encourage people to move away from using easy to detect drugs like cannabis, to harder to detect drugs like methamphetamine," he said.
Mr Bell argued the policy failed to take into account the stages of beating chronic drug dependency.
"Drug dependency is a chronic and relapsing condition, so people might be in recovery, but they might slip - they might fall off the wagon. Is the government going to sanction them for something that seems to be a natural part of the drug recovery process?"
Figures provided to the Drug Foundation by the Ministry of Social Development showed that of the more than 100,000 beneficiaries who failed to meet some sort of obligation in the year to the end of June 2016, just 144 of those failures were to do with drugs.
That figure included not turning up to a test, as well as not passing it.
Benefit advocate Kay Brereton said while the focus on young people was great, it was hard to build their trust when the threat of sanctions loomed large.
"When people's benefits get sanctioned, they've got this choice between 'do I have somewhere to live or do I eat food'. I think for the young people we're talking about, they will choose to have food and they will have nowhere to live. They may end up couchsurfing.
"Do you want to hire someone who doesn't even have stable accommodation - are they going to still be in the same city next week?"
But National social development spokesperson Anne Tolley said sanctions worked.
"Ninety-five percent comply, but then you know it's a personal choice for people. Very few turn up looking for social housing, but the numbers are very small," she said.
The plan also included guaranteed work experience or training, financial management training, and intensive one-on-one case management.
Mrs Tolley said many people who are under 25 will not go for a job if it requires a drug test.
"That's an automatic barrier for those young people. So what we're saying is, we'll offer you rehabilitation - it might be counselling or addiction services, to help you with that drug issue so that you can apply for that job, because you will pass that drug test."