The Ministry of Social Development says it is moving with "urgency" to investigate after it appears Work and Income spent decades wrongly advising some benefit applicants that they cannot get support until their redundancy runs out.
Last week, Work and Income admitted it had made an error after it rejected the benefit claim of an Auckland hotel worker due to her Covid-19 redundancy pay-out.
Legal advice suggests it has been unlawful since 1991 to include redundancy as part of the calculation for a benefit stand-down.
RNZ has been contacted by scores of people who believe they are in a similar situation to the hotel worker. Some cases are from the last few months, while others date back to the early 1990s.
Kay Read, the general manager of client service delivery, said "the issues ... raised are important ones".
"We take seriously our responsibilities to provide correct entitlements to those who need our assistance.
"We have people looking into this with urgency so we can get to the bottom of the issue.
She expected more information to be available in a couple of weeks.
Work and Income has urged people who believe they have an issue to get in touch.