Labour is promising to re-establish tertiary-fee allowances for beneficiaries if re-elected, subsidised from the COVID-19 Response and Recovery fund.
Social development spokesperson Carmel Sepuloni said Labour wants to reinstate the Training Incentive Allowance (TIA) to assist with costs of getting a degree level tertiary education.
The party will also change benefit abatement levels to ensure "those on benefits can keep more of what they earn in part-time jobs", Sepuloni announced on Saturday.
The allowance, established to help cover the additional costs of studying while on the benefit, was slashed by National in 2009.
"COVID-19 is going to impact incomes and employment significantly, which is why Labour is focused on improving New Zealanders' access to training, creating a more highly skilled workforce and ensuring those on benefits can keep more of what they earn," Sepuloni said.
TIA is targeted at sole parents, disabled people and their carers, and provides extra support towards the cost of study.
"We know that part-time work can be an important step toward full-time work, but the current thresholds can make it hard for people to enter the labour market or take on more part-time work."
"This support is critical to ensuring that our people continue to develop the skills needed for New Zealand's economic recovery and rebuild."
The expansion of TIA will cost around $431 million over four years and will be funded from the COVID-19 Response and Recovery fund.
Up to 30,000 New Zealanders will be impacted as a result of this policy - which aims to enable people to "keep more of what they earn and increase the financial incentive to stay in or take up part-time work".
Also, beneficiaries won't lose money at such a steep rate when they work, Sepuloni said.
Presently for every dollar earned over $90 a week for Jobseeker Support, $115 for sole parents and $215 for supported living payments, they lose money from their benefits - this will be changed to $160 a week for jobseekers and solo parents, and $250 for supported living payment.
"We know that part-time work can be an important step toward full-time work, but the current thresholds can make it hard for people to enter the labour market or take on more part-time work," she said.
"It also means low income families don’t get to keep extra income they earn that could help them get by...
"Up to 30,000 New Zealanders will be better off as a result of this policy and can keep more of what they earn."