Historical fiction writer Kirsten McKenzie said it was very difficult to make a fulltime living from writing.
Her family had to make cutbacks to support her writing career, which she said was a necessary sacrifice to invest in the future.
"In the short term, we got rid of Sky, we got rid of our home phone line, all of those places where we could save money.
"I am in the luxurious position of having a husband who supports me financially, because being a fulltime writer would not currently be funded by my two books."
McKenzie said writing wasn't an easy career, even for those who hit it big.
"I've met Eleanor Catton, and even winning the Man Booker prize for The Luminaries isn't enough for her to sit back and not work.
"Even she has to keep putting out books, and working, and lecturing, and the rest of it.
"So for those of us coming in behind her and not winning the Man Booker prize, it's a long term goal to earn money from writing."
Along with the income woes, the survey found one in five writers had experienced copyright infringement.
Many reported that finding a publisher for their work was becoming more difficult.
NZ Society of Authors president Kyle Mewburn said the survey was a stark presentation of the facts.
"The vast majority of writers are working at a minimum wage job with no insurance, overtime, or holiday pay, and absolutely no job security."
Mewburn believes the solution lies in "an investment in our cultural health".
"We really need our local readers to buy more local books from local bricks-and-mortar bookshops."
Copyright Licensing NZ chief executive Paula Browning said the report showed writers needed more support.
"We know that we need a strong local writing and publishing industry so that New Zealand stories are told, both by New Zealanders and for New Zealanders."
A Creative New Zealand spokeswoman said it advocates "for and supports high quality New Zealand literature, among its support for a range of art forms".
"Our aim is to help build dynamic and resilient New Zealand arts that are valued in Aotearoa and internationally.
"In the 2014/15 year, our overall support for literature was $2.41 million. Preliminary analysis of data from the 2015/16 financial year shows a significant upswing in support for individual writers to create work, with grants for individual writers alone totalling $516,822."
The full report is available at www.copyright.co.nz.