The number of beneficiaries facing sanctions for failing to meet their obligations has nearly doubled since 2008.
Figures released by the Labour Party show benefits were withheld or cancelled 57,168 times last year, compared to 29,689 times in 2008.
Labour's social development spokeswoman Jacinda Ardern says the increase is staggering.
"What that proves is not, as [Social Development Minister Paula] Bennett would have us believe, a Government looking to get people into jobs, but one focused on keeping official benefit numbers down," she said.
"They are wielding the sanctions stick but there simply aren't jobs for them to move into."
Ms Bennett says most of the sanctions were warnings.
"The number of people who have had their actual benefit suspended or cancelled has gone down since 2007/2008 and that's because now they're far more aware of what the expectations are on them," she told Radio New Zealand.
Changes introduced in 2010 under the government's Future Focus policy include greater work-testing obligations for beneficiaries.
The government has also announced new sanctions on beneficiaries wanted by police or who fail drug tests.