In 2014, the department had achieved a 12 per cent reduction in reoffending and was halfway to its target. Its progress has now fallen to 8 per cent.
Corrections officials said the reversal of progress towards the target was "puzzling" because rehabilitation programmes had been producing "excellent" results.
The number of offenders who were engaged in rehabilitation programmes was at a three-year high.
Ms Collins defended the department's progress on Wednesday, saying it had been given an ambitious target.
The minister said there were a number of reasons why progress had slowed.
In particular, Corrections was now dealing with a more challenging group of offenders, she said.
This was a result of police increasingly diverting less serious cases out of the justice system. Corrections had been left with fewer first-time and low-risk criminals, and a larger proportion of people who were more likely to reoffend.
In response, Corrections was identifying sub- groups of offenders who were most likely to commit more crimes.
Ms Collins said these included people who committed burglary and other "dishonesty" offences, female offenders, and offenders being released into the community for work.
The department was also targeting offenders who previously received little or no interventions, such as people on short sentences or community sentences.
It was trying to build more partnerships with employers to help people with criminal convictions to get into work.
The briefing said the department had signed 44 formal agreements with businesses to take on convicted criminals, and these employers have offered a total of 351 jobs so far.
Getting ex-prisoners into work has been found to be one of the most successful deterrents to repeat offending.
Overall, crime continues to fall in New Zealand, and a separate Government target of a 20 per cent decrease in offending by 2017 was well within reach.
Target:
25%
Cin reoffending by 2017, (from 2011 baseline)
Progress:
12%
June 2014
8 %
September 2015