She was speaking in Kurow after launching the biography of Sir Arnold Nordmeyer, one of the architects of New Zealand's social security scheme.
Miss Clark said the 1938 Social Security Act formalised in New Zealand the philosophy of looking after people who were struggling to cope on their own and giving them a hand up.
National's release of its benefit policy the day before the 70th anniversary of the 1938 Act was "pretty appalling" for its attack on beneficiaries.
The Invalids Benefit provided long-term help.
And while the Sickness Benefit was not a permanent condition, people needed to get well.
"That will not be helped by the constant threat of having their income taken away."
The National Party policy, released by leader John Key, proposes introducing more frequent reassessment during the first few months a person is on a sickness benefit.
Anyone on a sickness benefit continuously for 12 months will automatically be sent to a "designated doctor" for a second opinion on their work prospects.
Miss Clark said any system had to have checks and balances, and the one for sickness beneficiaries already had those checks.
However, people had the right to be treated with dignity.
The prime minister was particularly scathing of remarks made by Mr Key in introducing the policy where he harked back to the days when his family was poor and the benefit given to his mother kept the family together.
"It's like he has got to the top of the ladder and pulled it up under him, denying other people the chance to improve their position."
National Party welfare spokesman Judith Collins said Labour needed to stop "hysterically misrepresenting" her party's benefits policy.
Under National, single parents would be required to engage in 15 hours of employment, training, or job-seeking activities.
If they could not find work, their benefit would not be cut or reduced.
That was the same as the work obligation Labour now placed on the partners of people receiving the unemployment, sickness and invalid benefit.
"Helen Clark's claims about a return to 'work for the dole' is utter garbage. National has specifically rejected that approach in this policy.
"If Labour really cared about the plight of beneficiaries, why, after nine years, hasn't it adjusted the amount a beneficiary can earn before they start losing their benefit?"
