Masterton dipped less than 1 per cent to 2127.
Trevor MacKiewicz from Wairarapa Advocacy Service said the drop in numbers didn't reflect increased opportunity.
Local beneficiaries were desperate to find work, but the jobs just weren't available.
Mr MacKiewicz said Work and Income encouraged some beneficiaries to do courses to help them upskill, moving them on to a student allowance rather than a Jobseekers benefit.
"They juggle the numbers. If you've been on the Jobseekers benefit [long term] and you have a medical certificate, they'll say 'We think you need to get off the Jobseekers go onto the sickness benefit'."
Many beneficiaries were having to look further afield in Wellington and Christchurch for work.
"There's job difficulties in Masterton and people are trying to find jobs, but there's just nothing available."
Nationally, the number of people on benefits dropped by more than 16,000 in the year to June, with figures for the quarter at their lowest level since 2008.
Sole parents contributed heavily to the change, with the number of recipients falling 10.7 per cent over the year.
Minister of Social Development Paula Bennett said the dropping number of teen parents on welfare was another positive trend.
"Sole parents, particularly those who go on benefit in their teens, have the highest lifetime costs of any group on welfare and are more likely to stay on benefit the longest."
Teen parents spent an average of 19 years on the benefit, at a total cost of about $246,000 over a lifetime, Ms Bennett said.
"We've deliberately targeted our welfare reforms at sole parents by investing millions into intensive support and training and into help with study and childcare, so that working while raising children alone is achievable, and rewarding."
Numbers on the Jobseeker Support benefit were also down 7500 on the previous June quarter, and had been declining consistently since 2010.
The figures are consistent with Statistics New Zealand's most recent household labour force survey, which showed the national employment rate rose 1.5 per cent in the year to March to 65.1 per cent of the working age population.
An overhaul of the welfare system in the past few years has seen sickness beneficiaries, sole parents and widows with no children under 14 face the same requirements as other jobless people, pushing more people off benefits back into paid work.
