The Ministry of Social Development is insisting it made a one-off mistake in stopping a woman's benefit before they had investigated a tip she was cheating the system.
The Auckland solo mother of three was initially wrongly told her benefit had been cut because she had been on two Tinder dates - but the real reason was a complaint made by a member of the public that she was living with a man and was working.
The accusation turned out to be untrue and the ministry's spokeswoman, Kay Read, said the allegation should have been thoroughly investigated and the woman told what was going on.
The case worker made a mistake, she said.
"We suspended the benefit and we should not have done that because we should have one, had the conversation and then two, if we were going to do that we should have actually provided a warning," she said.
Ms Read said the ministry gets up to 15,000 claims of benefit fraud a year through its dedicated tip-off line, and each one has to be investigated.
The ministry was not able to immediately provide figures about how many claims turn out to be false.
Ms Read said the ministry got it wrong in this case but she insisted it was not a sign of a systemic problem.
"One case like this doesn't mean we really have an overall culture problem in our organisation," she said.
"I own this, the fact that we are doing something about this case in particular and we want to take a learning from it."
There will be no disciplinary action against the manager who made the mistake.
But the case has reignited calls for a culture change at Work and Income and has shocked barrister Catriona MacLennan.
She said it was clear staff urgently needed more training and she was worried it reflected a wider culture at Work and Income of targeting vulnerable women.
She had dealt with many cases where disgruntled ex-partners, for example, have made false allegations of benefit fraud, said Ms MacLennan.
"Work and Income seems to act very readily on the complaints and in my experience, doesn't really think much about the possible motivations and whether there is an element of disgruntlement and revenge in these allegations," she said.
Ms MacLennan said some of her clients have been caught up in stressful investigations that have gone on for years before they were cleared.
The beneficiary advocacy group Auckland Action Against Poverty sees solo mothers almost daily who are under pressure from Work and Income about their relationship status.
Co-ordinator Ricardo Menendez March said they are confused and worried about what officials count as financial dependence.
"Often they're met with a lot of intimidation and shame as well because that in itself affects their ability to lead normal, romantic lives with their partners," he said.
"Work and Income sort of is suddenly arguing that they're financially dependent [on their partner] and that affects their relationship with whoever they're seeing."
Jan Logie from the Green Party said women should have the right to pursue a relationship without fear of having their payments cut.
She said how Work and Income dealt with women on benefits needed to change.
"It's in nobody's interest to leave it the way it is at the moment," she said.
"We do need quite a significant overhaul to ensure that people can ... be supported to live decent lives."
As part of its confidence and supply agreement with the Greens, the Labour-led government has promised to remove excessive benefit sanction
Discussions were underway about doing that, said Ms Logie.
While changes could not come soon enough for those being disadvantaged by the system, she said problems could not be fixed overnight.
In a statement, the Minister for Social Development Carmel Sepuloni said while this particular incident was disappointing, she was heartened that the ministry had apologised and rectified the situation.
She said while not everyone who goes to the ministry has a positive experience, she was working closely with officials to develop a comprehensive work plan for culture change and an announcement on this would be made in the near future.