A Ministry of Health document obtained by Radio New Zealand heavily criticises a plan by Government to drug test beneficiaries.
The memo indicates the plan to cut benefits for job seekers who fail drugs tests could cost up to $14 million per year - double what the Government is setting out to save.
It also says the move could have a dubious effect on people's health and overall welfare.
Beneficiaries who use drugs recreationally could overstate their use to prevent their benefits being cut.
Social Development Minister Paula Bennett says she has her work cut out making sure she does not waste money and is working through the final details.
Labour says the Government is not being upfront about the true costs of the policy. The Council of Trade Unions says the plan should be scrapped altogether.
Ms Bennett says the alternative is to do nothing and she does not intend to let people sit on a benefit and take drugs in a receational manner and not be work tested.
She says new legislation enacting the changes will be introduced to Parliament in the next few months.
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