The National Party is writing to the Auditor-General requesting an independent investigation of the $350 cost of living payment, after it was received by some ineligible Kiwis overseas.
The party's deputy leader Nicola Willis wants a review to determine the scale of the issue, in what the party described as an "embarrassing" error.
The first of three instalments was automatically sent out to more than two million people on Monday. Two further instalments will come through on September 1 and October 3.
To be eligible, a person must be a New Zealand tax resident aged 18 and over, who earns $70,000 or less a year and who is not receiving the winter energy payment. The initiative, which is projected to cost $816 million, was announced in Budget 2022.
READ MORE: Cost of living support payments begin today
Prime Minister Jacinda Ardern on Monday acknowledged that some Kiwis based overseas would also be able to receive the payment, despite not being eligible.
“By using that simple design, there will be a small number of individuals who we may not be able to tell are not in New Zealand. Again, relative to the number who are eligible and will rightly receive it, it’s a small number," she told Breakfast.
“At the same time, I’d rather that simplicity because the alternative is that you have this system where you apply for something and we know we wouldn’t have reached the people we needed to.”
READ MORE: Govt's 'duty' to support Kiwis amid cost of living crisis - Ardern
National's Nicola Willis told reporters on Tuesday that there "have been numerous stories in recent days" from Kiwis based overseas who have received the cost of living payment "despite being ineligible, not having asked for it, and frankly feeling it's quite embarrassing that they've received it".
Among those who received the payment in error on Monday was Charlotte Castle, a Kiwi who has been based in Australia for the past six years.
Castle said she initially mistook the email notifying her of the payment from the IRD as spam.
"I was quite surprised to actually go to the IRD website and read the official mail and find the payment had actually gone into my bank account already when I checked this morning," she told 1News.
"Cost of living has gone up here, so I could certainly use it towards meeting my expenses here in Australia. However, I do feel a degree of guilt in doing that because, I didn't need the payment and I certainly feel that... I've received it in error, really."
READ MORE: Kiwi in Australia unsure after getting Govt payment ‘in error’
Willis called the matter not only a "significant misuse of taxpayer funding", but also "potentially an issue at law".
She said the eligibility criteria in the cost of living legislation was explicitly for people who are tax residents in New Zealand, and also required that they are present in the country.
"What we have seen is money paid out by New Zealand taxpayers against the purpose of the legislation."
Willis said the party believes the matter is "very serious".
"We know that there are a million New Zealanders living overseas - the question is, how many of them have a dormant bank account that the IRD has just thrown some money into?
"It's not good enough to say, 'Well, we think it's less than 1% but we don't know.' We think the scale could be a lot bigger. This is taxpayer money and it could run into the tens of millions."
She announced that the party will be writing to Auditor-General John Ryan to ask for an independent investigation into "just how wide the scale of this problem is and to determine whether taxpayer funds have been used without the proper authority of Parliament".
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