The number of people on a benefit fell by nearly 10,000 in February, but the Government is expecting numbers to rise again because of the Christchurch earthquake.
The fall in benefit numbers included almost 3779 coming off the Unemployment Benefit, with half those being young people.
However, Social Development Minister Paula Bennett says the reality is benefit numbers will increase as a result of February's earthquake which has severely damaged many buildings in central Christchurch.
Ms Bennett says the Government's wage subsidy has bought some time for employers and individuals to determine what the future holds.
The support package is keeping 35,000 staff and sole traders linked to their jobs and providing financial support for 3000 people now out of work, she says.