UPDATED 7.14pm: New Zealand will increase its refugee quota from 750 a year to 1000 – and trial a scheme that would see community groups sponsor certain refugees.

More: Decision imminent on refugee quota increase

Prime Minister John Key said the quota increase would be from 2018.

It will be the first increase in 29 years, but falls short of the 1500 places per year that Labour, the Green Party, United Future and NGOs such as Amnesty International have pushed for.

Amnesty International immediately slammed the 2018 increase as “absolutely shameful in the face of the world’s biggest humanitarian crisis”.

A recommendation from Immigration Minister Michael Woodhouse was taken to Cabinet this morning.

LISTEN ABOVE: Minister Michael Woodhouse talks to Larry Williams

Mr Woodhouse said the quota had not been doubled because of the need to provide proper and ongoing support for those that do arrive. He said many refugees were still struggling to find work some 10 years after their arrival.

Costs will increase by about $25 million to $100 million per year.

Mr Key said it might not compare to the $20 billion spend on defence, but helping refugees isn't just about money.

"New Zealand has always worked very hard to make sure that when people come here that we give them the very best that they can expect when they come, and that means priority on housing, availability for jobs, that means education."

Mr Woodhouse said: “Numbers matter...but it's not enough to simply relocate them to a strange country and then leave them.

“There is a significant investment that needs to be made to ensure that the settlement outcomes are good...we are focusing as much on the quality as well as the quantity.”

Given the Orlando massacre was the work of the son of immigrants from Afghanistan, Mr Woodhouse was asked what checks are done of those arriving here.

"They are ruled out on the basis of any connection on either side of conflict they or their extended family members. Other matters such as polygamy obviously rule them out from a cultural perspective. As far as we can be we are satisfied that those who are coming are those most in need and are who they say they are."

New Zealand's Catholic and Anglican Church leaders last September announced their communities could support at least 1000 refugees in their communities.

Referencing such public response to the global refugee crisis, Mr Woodhouse said the Government would pilot a community sponsorship programme next year, initially involving about 25 places.

Details were still to be worked out, but there were similar models in other countries such as Canada.

“The Vietnamese and Cambodian refugee placement process in the late 1970s...did place specific attributes, special characteristics on those refugees - for example the ability to speak English, certain job skills - and they were sponsored by churches, rotary clubs, lions clubs around the country,” Mr Woodhouse said.

“I think they settled very well. In addition to our quota obligations, I think it’s worth testing whether or not that community support that we saw last year is enduring, and that’s what this pilot will look at.”

Possible criteria such as the ability to speak English would only apply to the small pilot programme, and not the wider quota, that would be selected on those most in need of support, Mr Woodhouse said.

Immigration NZ will also next year choose another location for refugees to be resettled after they have been processed at the Mangere Refugee Resettlement Centre.

The current resettlement locations are Auckland, Hamilton, Palmerston North, Wellington, Nelson and Dunedin.

Under pressure to increase the quota as a response to the Syrian crisis, the Government last year confirmed an emergency intake of 600 Syrian refugees over the next three years, on top of the annual quota.

Mr Woodhouse said there are currently 50 places per year earmarked within the existing quota as a response to an international crisis. This would now be doubled to 100.

Other spaces would be filled by regional allocations, including 50 per cent from the Asia-Pacific region.

Today’s announcement comes ahead of next Monday’s World Refugee Day, which will be marked with events at Parliament and around the country this week, and the official opening of the Mangere Resettlement Centre on Saturday.

The quota has remained at 750 refugees a year since 1987.

Party leaders from both sides of Parliament have urged the Government to raise New Zealand's refugee quota.

A 20,000-signature petition was presented to Parliament in March, urging the Cabinet to double the annual quota to 1500 refugees a year.

That level of increase was backed by three parties - Labour, the Greens and United Future. The Act Party supported a higher quota, but stopped short of doubling it.

NZ First leader Winston Peters has supported an increase in the quota, provided general immigration numbers are brought down significantly.

He said the 250 extra places would “end up pleasing no one”, and “mindless mass immigration policies” needed to urgently change.

He said the question's not whether we can do more for refugees, but whether we can do so whilst under pressure from mindless mass immigration policies.

"But if we were running a sensible immigration policy, bringing in the people that we would target to be of benefit to this country, then of course we could do more internationally on the refugee situation."

Act leader David Seymour said his party welcomed the increase, but wanted to new arrivals should be made to sign a statement of commitment to New Zealand values, including freedom of speech, freedom of assembly, and respect for women and those of different sexualities.

Islamic Studies Research Unit head Zain Ali, from the University of Auckland, described Mr Seymour’s proposal for a values statement as “condescending” and “naïve”.

“The assumption seems to be that [refugees] need to be reminded about what free speech is, what is it to respect women. It is slightly condescending.”

It was naïve to assume that migrants or refugees could be “coerced” into adopting specific values simply by signing a piece of paper, he said.

“What makes New Zealand a great place is that people don’t force values down your throat,” Dr Ali said.

“There is openness here. People aren’t in your face telling you ‘This is what it means to be a Kiwi. Are you willing to be a Kiwi?’”

Mr Peters accused the Act leader of stealing his party’s policy having raised a similar idea for migrants last week, saying that all new arrivals to New Zealand should be interviewed to check that they respected New Zealand’s “views”.    

Describing Mr Seymour as a “toy MP”, he said: “Being a secretive admirer of New Zealand First is no excuse for plagiarising that party’s leader’s statements.”

United Future leader Peter Dunne said the increase was “miserly”, and the quota needed to be reviewed much more frequently and with council, community group and business sector involvement.

“Sadly, today’s decision is too timid, and will leave New Zealand looking miserly and insular in terms of its approach to the refugee question."

Green Party Co-Leader James Shaw said the Government's done the bare minimum by making a tiny increase.

"They could have done a great deal more and there was huge public support for a doubling of the quota."

Labour Party leader Andrew Little said it's a miserable increase, and it should go to 1500.

"The advice we've had from organisations like the Red Cross is that we could accommodate up to 1500 a year and still achieve the same quality of resettlement that we are currently achieving."

Amnesty International’s executive director Grant Bayldon said the increase was too little and would start too late for people whose lives could be saved through resettlement.

“This is a shameful and inhumane response and a stain on our country’s reputation as a good global citizen.

“The reality is that we need a significant response from a country that currently holds a place on the UN Security Council.”

Mr Bayldon said we would need to accept more than three times the refugees we currently are if we are to be on-par with our Australian neighbours.

"Doubling the quota was really the minimum credible step even that would leave us well behind Australia, the United States, Canada, Ireland. Most of the other countries we compare ourselves with are well ahead of us on a per-capita basis."

He said the government has the ability to change both the quota and the resources to support agencies.

"The Government reviews the refugee quota every three years but that is entirely a self-imposed time limit. There's no reason the Government can't revisit this issue and make a sizeable interest in the refugee quota."

Immigration NZ has confirmed that it has capacity for 1500 refugees a year if funding for community services is increased.