Green Party co-leader Metiria Turei concedes she could still be charged with fraud after she admitting to lying to authorities to keep her benefit.
In her biggest speech of the year, Ms Turei made the extraordinary confession while announcing her party's plans to dramatically reform New Zealand's welfare system.
Speaking at the Green Party annual meeting in Auckland, she said that as a solo mother on a benefit she did not tell Work and Income she had extra flatmates who were paying rent.
At a news conference afterwards, Ms Turei said she could still face consequences for her illegal behaviour 24 years ago.
Asked whether beneficiaries in a similar position should lie to authorities, she said it was up to them.
She admitted her admission could hurt her or the party, but said she wanted the Greens to be "defined by our truths'', not by lies.
Ms Turei's experience on the DPB was one of the driving forces behind the party's new "Minding the Safety Net'' policy.
It goes well beyond changing entitlements, instead aiming to transform a culture which Ms Turei said had become punitive and was trapping people in poverty.
The Greens want to lift core benefits by 20% while scrapping all sanctions, including penalties for women who fail to reveal the name of their child's father, or sole parents who want to begin a long-term relationship, promises which prompted a standing ovation from the Green members.
The Greens will also raise the top tax rate to 40% on incomes over $150,000, while lowering the bottom tax rate, a move which co-leader James Shaw said would mean 97% of New Zealanders earning less than $150,000 would receive $209 more a year.