New figures show more than 12,700 fewer people were receiving a benefit at the end of last year compared to 2013.
Almost 310,000 people, or 11 percent of the working age population, were receiving a main welfare payment at the end of 2014 - the lowest number for a December quarter since 2008.
Social Development Minister Anne Tolley said the Government was continuing to move people into work which meant healthier, more prosperous households.
More than 5500 fewer people are on the Jobseeker Support benefit and more than 5300 fewer people are receiving Sole Parent Support.
However, the number of people drawing the Supported Living Payment has jumped by about 1200.