Struggling families are borrowing money for the basics and social services are grappling with a spike in demand alongside growing waitlists due to rising inflation.
It comes as annual inflation hit a 30-year high in December, with the consumer price index up 5.9 per cent from December 2020, pushing up the cost of living.
Stats NZ also revealed the price of food was up 15 per cent compared to five years ago, and petrol was up 35 per cent in that same time, costing $2.45 per litre.
According to Inland Revenue, $8.8 million in KiwiSaver funds were withdrawn for financial hardship in November last year.
Tauranga Budget Advisory Services manager Shirley McCombe said adult children were moving home, families were living together, and many were borrowing money to meet daily needs.
The situation was widening the gap between those who have and those who have not, she said.
"Anger, resentment, and depression are not uncommon. Dependence on government and social services grows and self-esteem whittles away."
Families were using foodbanks to bridge the gap in their budgets for petrol, food and utilities, "but even with help, it is often not enough".
The Ministry of Social Development also provided 9528 food grants in December, the highest demand had been since March 2021.
Businesses, already under pressure from Covid, would find it difficult to respond to wage pressures created by inflation creates, she said.
SociaLink general manager Liz Davies said many services had waiting lists as they're seeing demand for their services double and triple.
Other organisations were tightening referral criteria to avoid waitlists due to the risk of having someone waiting without getting help, she said.
"The social sector isn't able to cope with all the needs, even with a very generous community donating food, goods, money, and government funding.
"People are getting increasingly desperate and stressed trying to make ends meet and basic needs such as housing and food are not being met."
She said it was likely crime would increase with people "stealing to survive", which would criminalise people who were trying to get by.
She feared social stability and cohesion would be affected as the gap between the well-off and those struggling widened.
Tauranga Salvation Army corps officer Kylie Overbye said the team were worried the level of need may increase to a point where people are unable to get the necessary help.
Things like fruit, vegetables and meat are becoming a luxury for some as incomes, whether wages or benefits, don't reflect the cost of living.
"One very practical way to help the most vulnerable people in our community would be for GST to be removed from food."
The anxiety of those approaching the services was increasing.
"They fear that they are failing their children, or their children may be taken from them because they are struggling to provide the essentials after their rent has been paid."
She said the rising pressures could contribute to family violence, drug and alcohol abuse, self-harm, child neglect, malnutrition, and physical and mental health issues.
Rotorua Budget Advisory Services manager Pakanui Tuhura said in his 12 years on the job, he's never seen the cost of living this high.
More people wanted KiwiSaver Hardship withdrawals due to the economic impact of Covid, and that was increasing with the arrival of Omicron.
This would impact the future society, he said, especially if the cost of living kept rising and baby boomers left the workforce.
This risked larger, poorer generations as money pegged to help in people's retirement was used to meet essential living costs.
Most of the service's clients had already reduced non-essential spending and were now turning to community organisations to help with the basics.
Some people who normally would tough it out are getting help from Work and Income to get by, and others were putting their pride aside to get help from friends, family and social services, he said.
He said although times are hard, the number of jobs available appeared to be on the rise.
"Everyone in our community will be affected ... most people, other than the mega-rich, will be looking to lead simpler, cheaper lives."
He said the impacts of Covid on supply chains, rising food costs, and increasing housing and rent prices were all pushing up the cost of living.
The median weekly rent in Tauranga was a record $620 last month, up 13 per cent year-on-year.
While demand increased by 11 per cent in that same time, supply dropped by 29 per cent.
Rotorua Whakaroa's Elmer Peiffer said he and his wife, Gina, had to take on boarders to be able to support the community.
The couple received the supported living payment and all their income went to rent, power, insurance, phone and internet.
"The whole situation of living in a home as a family unit or couple has pretty much gone out the window, you have to bring in other family and friends just to financially get through week by week," he said.
"We are under no illusion that if we have anymore rent increases, we could very well be looking at living out of our van or on the streets ... that's a very real possibility.
"It's always in the back of your mind. I'm stretched to the limit, beyond my limit and I'm just surviving. I'm not living, I'm existing."
He said if they couldn't afford rent, the couple would have to look at shutting down the charity, as they donated a lot of their board money to operations.
The rising costs of living also affected those they support, and more people were using other people's names to get food more than the once allowed per person per week.
"If all of your money is going on rent, utilities, and whatever the costs of living are and you've got nothing left, of course, you're going to try free up some money somewhere."
The demand continued to increase, and Tuesday saw 180 families arrive at the store, up from the usual 120 to 150.
Tauranga Housing Advocacy Trust board chairwoman Carol Heena said the "stress is immense" with people on all incomes feeling the pinch.
Any government policies that allowed a little more money in people's pockets had been eroded over the past six months particularly, she said.
"People on low incomes are isolated in participating in their communities."
Ministry of Social Development regional commissioner Mike Bryant said the agency increased staff numbers by 1200 in the country between June last year and the year prior to meet demand.
The agency's main focus is employment, financial and housing support and it monitored need in the community to respond quickly when needed, he said.
In April, family support will be increased by $20 a week, families with children will get an additional $15 per adult per week, and student allowance and student loan costs for living will increase by $25 per week.
He said there was a promising fall in unemployment by 375 in Rotorua in December when compared to the year before, and by 654 in Tauranga.
'He has disregarded our voice and continued with this divisive kaupapa.'