Mrs Bremner was speaking at PSO's annual meeting, the last she would attend as chief executive before leaving next March.
''I find myself in a bit of a dilemma.
''Have we contributed to the problem by seeking to support the needy behind closed doors?
''Would we as a country respond better if there was begging visible in our streets?'' she said.
New Zealand ''never really recovered'' from the 1991 benefit cuts that radically cut the incomes of the disadvantaged.
''Inadequate income is at the heart of the problem that successive government have failed to attend ... ''
Mrs Bremner dismissed the efforts of the outgoing National Government, saying its one-off benefit rise of $25 a week was not enough.
''It is a serious issue and one that just giving out food parcels can't solve.
''It's far bigger than that, and I think is the underlying issue that contributes negatively in so many ways as citizens in our land feel disenfranchised and unable to see a way out, a hope for the future, because there's a fine line between hope and despair.''
PSO tried to help with research and advocacy alongside its programmes and services.
Its role had been made more difficult because of changes in contracting, legislation, and inadequate funding.
Expectations increased, but funding did not keep up.
DHBs were in a ''monopolistic'' position, she said, recalling the shock loss of the $5 million southern home support contract in 2013.
''Somehow the wider role of voluntary organisations in contributing to community cohesion and social capital somehow gets lost in the tighter focus on procurement of service to meet government priorities and requirements,'' she said.
National's ''actuarial'' approach to welfare - dubbed ''social investment'' by its architect, outgoing Prime Minister Bill English - might be dropped by the new government, she said.
Social investment was too ''linear'' to deal with the needs of ''complex family situations''.
She also spoke about a serious funding shortfall in aged residential care, saying a new funding model was essential.
Mrs Bremner was awarded life membership of the organisation last night to recognise her contribution during her 23 years in the job.
Mrs Bremner is moving to Botswana with her husband, Graeme, next year.
