UPDATED: 10.44AM Our current welfare system is coming up short in terms of solving poverty.

That's the finding of a new report by the Maxim Institute which looks into what causes poverty and what brings people out of it.

Researcher at the Institute Kieran Madden said the current system works well for the majority of those stuck in poverty.

"Where the system is currently failing is for the small proportion of New Zealand is around 10 to 15 per cent who are suffering persistent poverty, so that is poverty over a long period of time."

Though Madden said solving poverty isn't simple.

"There's no one entity who can solve the problem either. It's going to require collaboration across government, business, community organisations and even the families themselves all have their part to play in solving this issue."

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Madden told Leighton Smith losing a job is by far the biggest trigger event that leads families to poverty, followed by unstable work hours.

"But for families in the future we also looked at intergenerational poverty. [We] came to the conclusion from the literature and the research that it's actually low educational achievement which is driving this intergenerational poverty."

Madden said parents have huge aspirations for their children when it comes to education but they aren't always equipped to help them.