The announcement also said job seekers would need to perform a minimum of three job-search activities every week for a month and report back to the Ministry of Social Development (MSD).
The new sanctions would ensure there was "accountability in the welfare system", Social Development and Employment Minister Louise Upston said.
"It's important beneficiaries who can work are taking steps to re-enter the workforce," Upston said.
"Consequences must exist for those who don't."
The new sanctions are part of the government's beneficiary traffic light system.
The system applies to people who receive a benefit with work or social obligations, such as Jobseeker Support.
They are given a green, orange or red status. Once someone is moved to red, they are sanctioned.
Those sanctioned will have to provide evidence of their activities at the end of their sanction to return to 'green' in the system, Upston said.
Craig Renney, policy director at the Council of Trade Unions, said there needed to be more evidence that these sort of sanctions had an effect.
"Is there evidence that these have worked elsewhere?
"If they were doing this when unemployment was falling and there were lots of jobs you can sort of go 'ok I can see why, how do we encourage people into jobs?' But when unemployment is rising and there are fewer and fewer roles, it looks a lot like just demonising people are doing their best."
The change will be introduced as part of the Social Security Amendment Bill, currently before Parliament,.
Ricardo Menendez-March, Green Party MP, said it was another punitive measure that would push beneficiaries deeper into hardship.
"They should be supported to find work in a way that matches their skills and aspirations with adequate work. Rather than pushing people into any job no matter how unsuitable for the person."
He said it was concerning that these sanctions were being added to the bill at this stage.
"This means oral and written submitters didn't have that information at the time of making submissions. We had a very high level of written submissions on the bill which meant we actually weren't able to accommodate all the results for oral submissions as a result of it.
"It feels like bad democratic process to slap these extra sanctions halfway through when they knew they wanted to do it from the beginning. They could have delayed the bill until all of its components were clear and ready."
