In some cases people had had to pay for two or three appliances because of the poor condition the original appliance they bought second hand, Mr MacKiewicz said.
"I think it's a good idea because it does cost a lot to repair these things. Sometimes clients have to go back to Work and Income two or three times because of big repair bills. If they had a new appliance it would come with a warranty and is of good quality. This will benefit the customer. If nothing else, it will give them peace of mind."
It would also clamp down on second-hand dealers and beneficiaries who ripped off the system, he said.
Mr MacKiewicz said he had heard of cases where the dealer had raised the price on quotes for second-hand appliances with the client and shop owner then splitting the difference.
"I've heard of a few individuals doing it and this would rule that out ... they put an extra $50 or $100 on to the quote and then they split the difference."
Meanwhile, he hoped the Government would look at doing the same for other essential items beneficiaries might need advances for, like beds. "That would be good," he said.
Meanwhile, Mrs Bennett said she was committed to helping beneficiaries.
"In this year's Budget I announced we would work to get better value for beneficiaries and taxpayers in the way we help people purchase fridges, freezers and washing machines."
In the past year, more than $10.5million was spent in assistance for such purchases.
The ministry was anticipating the arrangement with Fisher and Paykel would result in a $10million reduction in hardship assistance for whiteware over the next five years, she said.
Appliances would have a two-year warranty, offering "confidence" to beneficiaries.
"For people on low incomes, paying to get the fridge or washing machine fixed can often mean going without other essentials."
The new system would rule out any rorting of the system as well, she said. "I've heard of these rorts and this initiative will stop it happening. The appliances will be bought direct from the supplier, delivered to the beneficiary and installed for them, so that should eliminate potential for exploitation."
The Government was committed to reducing the load on taxpayers and providing better services for beneficiaries, Mrs Bennett said.
"The Government's focused on getting better value for money for taxpayers and reducing costs for beneficiaries, and having settled on an agreement for appliances, we're now working on a deal to get standardised quality eye care, including glasses for beneficiaries," she said.
The new system would be rolled out in the South Island later this month, with the whole country covered by early next year.
As part of the agreement, the ministry and Fisher & Paykel would also be working together to identify employment opportunities within the company for beneficiaries - another positive outcome of awarding the contract to a single supplier, the minister said.
