Letters from Work and Income telling indebted families to take out loans and pawn their possessions are unacceptable, Social Development Minister Paula Bennett said today.

In Parliament this afternoon Labour's social development spokeswoman tabled a letter from Work and Income's Mangere office dealing with someone's application for Temporary Additional Support.

It agrees to give assistance and suggests other steps to be taken:

* Taking out loans to cover arrears;

* Pawning cellphone and children's PlayStation;

* Ringing debtors to reduce payments or refinance debt; and

* Seeking budgetary advice.

Another letter from the chief executive of Budgeting and Family Support Services Darryl Evans said the letter was offensive to him and the woman involved.

The point of budgeting advice was that indebted people did not go out and borrow more money.

"Often these families have bad credit and so, they are often forced to lend (correct) from loan sharks at exorbitant interest rates," Mr Evans said.

"To suggest that beneficiaries and new applicants pawn their cellphones and/or sell their children's PlayStations and toys is absurd, to say the least."

In Parliament, Ms King asked whether the minister found such letters acceptable and said there were other similar letters being sent.

Ms Bennett said she had no knowledge of the letter, but if it had been correctly reported to her she would not find it acceptable.

Ms King also asked whether budget advisory services were going to get a funding cut in the up coming budget.

All departments are undergoing a line-by-line review of spending.

Ms Bennett told Parliament that the government was intent on reducing back room staff numbers in order bolster front line services.

She did not say whether budget advisory services would get a funding cut.

Greens welfare spokeswoman Sue Bradford today highlighted the Social Development Ministry's look to cut staff by 5 percent.

This was highlighted as part of the ministry's plans in its briefing to Ms Bennett when she took over the portfolio.

Ms Bennett's spokesman said today that she was continuing to look at how to make spending in the ministry more effective.