An 11-person panel has been set up to advise the government on its promised overhaul of the welfare system.
The group - comprising of academics, economists and social advocates - is to report back with recommendations by February.
Social Development Minister Carmel Sepuloni said the taskforce had a wide mandate to consider.
"We want to make sure the welfare system is doing the job it was established to do - providing real support for New Zealanders at the times in their life when they need it the most," Ms Sepuloni said.
The panel would consider the overall purpose of the system, as well as specific recommendations on the sanctions regime, Ms Sepuloni said.
"We will be looking to review excessive sanctions. We will be looking at income inadequacy," she said.
"We will be looking at ... the interaction between the welfare system and Working for Families."
Auckland University professor Cindy Kiro would chair the group, Ms Sepuloni said.
"Her relentless focus on building on the potential in people reflects the principles of this government - that is, treating people with dignity and respect."
Ms Kiro, a former Children's Commissioner, set up the Taskforce for Action on Family Violence in 2005.
New Zealand's welfare system had increasingly focused on work entitlements over the past 20 years, she said.
"We've got a very complicated system in place, trying to juggle the diverse trade-offs that exist within such a system.
"Now we want to focus very much on well being - how do we support people to be able to engage in their communities?"
Ms Sepuloni said the government hoped to remove the stigma around being a beneficiary.
"We've got to change the narrative around the welfare system," she said.
"We're not going to be in the media every week putting the boot into beneficiaries ... and we've seen a lot of that over the last nine years."
The government planned to unveil some immediate changes to the welfare system in June ahead of the group reporting back.
Work had already begun preparing to remove a sanction on some solo parents and reducing abatement rates, she said.
The Labour Party commited to overhauling the welfare system in its agreement with the Green Party to form a government last year.
- Professor Cindy Kiro (chair) - director of Starpath Project at University of Auckland, former Children's Commissioner
- Professor Innes Asher - professor of paediatrics at University of Auckland, health spokesperson for Child Poverty Action Group.
- Kay Brereton - beneficiary advocate, co-convenor of National Beneficiary Advocates Consultative Group
- Dr Huhana Hickey - chair of Auckland Council Disability Strategic Advisory Panel, member of NZ Human Rights Review Tribunal
- Professor Tracey McIntosh - head of sociology at University of Auckland
- Dr Ganesh Nana - chief economist at BERL
- Phil O'Reilly - former chief executive of Business NZ, managing director at Iron Duke Partners
- Robert Reid - honorary president of FIRST Union, former general secretary of FIRST Union
- Trevor McGlinchey - executive officer for NZ Council of Christian Social Services
- Latayvia Tualasea Tautai - youth leader on the PACIFICA Inc West Auckland executive, university student
- Charles Waldegrave - founder of Family Centre, co-leader of NZ Poverty Measurement Project