Social Development Minister Paula Bennett has ruled out exempting all grandparents raising their grandchildren from work testing requirements, but says individual exceptions can be made.
Hundreds of grandparents have been told to undergo job training and get back to work or risk having their benefit cut.
Advocacy group Grandparents Raising Grandchildren says hundred of families are distressed after being told they must look for work as part of last week's benefit changes.
Many beneficiaries, including grandparent carers, were shifted to either Sole Parent or Jobseeker support. Under the changes, beneficiaries raising children must be available for part-time work if the youngest child is between 5 and 13, and fulltime work if the child is 14 and over.
Ms Bennett said on Thursday she has stressed to the Ministry of Social Development that exceptions can and should be made - particularly for those nearing retirement age or caring for children with special needs.
The minister said each person would be judged individually and she has reiterated to the ministry that there is room for discretion.
Di Vivian, the founder of Grandparents Raising Grandchildren, wants all grandparents to be exempt, saying it's distressing particularly for those who are close to retiring.
"A lot of these grandparents have had to step up and take these children because of neglect and abuse. A lot of them are naturally as they're aging having health issues of their own. A lot of these children are quite damaged."