Prime Minister Jacinda Ardern says there was no way to design a cost of living payment package that was perfect, but the Government stood by its decision to make the payment and to revise it as they went.

Auditor-General John Ryan published a letter to Inland Revenue Commissioner Peter Mersi voicing concerns the sloppy rollout of the payment did not exhibit good stewardship of public money.

The letter came after Revenue Minister David Parker announced changes to the scheme to check eligibility criteria. These include greater use of data to ensure people receiving the payment are actually eligible and in New Zealand.

The $350 cost of living payment was set up via the Inland Revenue Department (IRD) to help with the rising costs of inflation, split into three monthly payments of $116.67 starting in early August.

The first payment was received by many people living overseas, despite those people being officially ineligible. The second payment is due to go out this week.

Newly released figures show 4,912 people have opted out of the scheme, while 418 people have repaid their payments.

Ardern, speaking today at her post-Cabinet press conference, said it was intended to go to 2.1 million people and the IRD was now refining the screening tests of the payment, which was the first of its kind.

Ardern said it was the Government's duty to help people though the cost of living crisis.

"And we've done that."

She said the tighter checks were not done earlier because IRD was working on the getting the payment through the door, and was now making extra refinements.

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That meant some people who were eligible would not get it and would have to apply to get it.

"These are all things that will improve it. In a perfect world, would you have had that from the beginning? Yes."

She said she disagreed with the Auditor-General's assertion that the criteria was not clear, saying it was very clear and the issue was how it was tested.

Auditor-General John Ryan. Photo / Supplied

"Ultimately we always seek to make sure those who are eligible receive it. The question is how do you best do that."

She said it was their duty to make refinements on that.

The other options were to get people to apply, which she thought would have meant those in most need of it missed out. The other option was tax cuts, which she said would not have the desired effect of being temporary relief.

Ardern set out the savings for households from the cost of living suite of measures, including the fuel tax cuts, the half-price public transport and the pre-existing measures of the Winter Warmer payment and free school lunches.

New Zealanders who filled up at the pump at least once a week since the 25c reduction was introduced in April have saved about $276 dollars for a 40-litre tank, or $414 for a 60-litre tank.

"While times are undoubtedly tough we are well placed to come through this period."

Asked if the fuel levy reductions could end earlier than January as petrol prices dropped and incomes rose, Ardern said it had been set to that date and there was no undertaking to extend it further.

Uncertainty over location of Kiwi soldier's body

Jacinda Ardern said it was difficult to know for certain where Kiwi soldier Dominic Abelen's body was in Ukraine, and she could not say whether it would be possible to return it. Photo / Supplied

Ardern said the NZ Defence Force were still trying to ascertain whether any of their staff on unpaid leave were in Ukraine.

She said overall, three New Zealanders had now registered on Safe Travel as being in Ukraine.

She said it was difficult to know with any certainty where Dominic Abelen's body was, and she could not say whether it would be possible to return it.

Ardern urged people not to go to Ukraine because it was so difficult for the Government to help if there was trouble.

She said that was not intended in any way as a comment on Abelen, saying she had nothing but sympathy for his family.

PM responds to Mallard criticism

Former Speaker Trevor Mallard. Photo / Mark Mitchell

On Trevor Mallard's diplomatic posting to Ireland after finishing as Speaker last week, Ardern said after decades of service in Parliament, including as a minister and Speaker, he had demonstrated the ability to represent New Zealand's interests in Ireland.

Ardern would not say whether he would be offered a knighthood - although Mallard has said he would take one if awarded it.

Health NZ accused of secrecy

On Health NZ holding its board meetings behind closed doors, Ardern said it was a matter of hitting a balance between transparency and being able to get its work done.

She said the release of agendas and press conferences after board meetings would help ensure transparency.

She said it was a departure from the way the DHBS operated, but Health NZ had a wider responsibility and would be making commercially sensitive decisions.

She said in a similar way, nobody expected Cabinet meetings to be open to the public but there was a press conference afterward and documents were released.

Asked what her expectations were of Health NZ, Ardern likened it to Waka Kotahi.

Will NZ move to green Covid setting?

Jacinda Ardern said Cabinet would look at NZ's Covid settings "post winter" but would not be drawn on what might be on the table. Photo / Alex Burton

Ardern indicated Cabinet would look at New Zealand's Covid-19 traffic light settings "post winter", but would not be drawn on what might be on the table.

On isolation periods, she said dropping it from seven days to five would mean accepting there would be more infections because more people would be emerging while still infectious.

Ardern said the end of winter review and the regular review of settings would roll into one, and would consider issues including test-to-work, which would allow household contacts to keep working as long as they were negative.

National's finance spokeswoman Nicola Willis, who triggered the Auditor-General's letter, wanted the Government to investigate how many ineligible people received the payment and to apologise for the sloppy rollout of the $814 million scheme.

Ryan's letter noted the scheme was designed quickly, given the urgency of the cost-of-living crisis, but he argued the Government could have done a better job of ensuring only eligible people received the payment.

"In my view, good stewardship of public money required greater care when designing and implementing the COLP – ensuring that the criteria were clear and that the data used by Inland Revenue was adequate," Ryan wrote.

National's Nicola Willis wanted the Government to investigate how many ineligible people received the payment and to apologise for the sloppy rollout. Photo / Mark Mitchell

Ryan wrote he was also concerned the Government was unaware of just how many people had been given the payment, despite being ineligible.

"I am concerned that the Government does not know how significant the scale of payments to ineligible people is. The Minister of Revenue has been quoted by media as saying that it could be around 1 per cent of payments.

"Inland Revenue told my staff that it is doing some work to improve the accuracy of future payments, but does not know, and may never know, how many ineligible people might have received the payment. This is, in my view, unacceptable," he wrote.

The letter was in response to a complaint by Willis following the rollout of the first of three payments earlier this month.

Willis had asked the Auditor-General, Parliament's spending watchdog, to look into the complaint.

Ryan was comfortable that the payments were lawful - but he raised concerns about other parts of the payment.

Willis said the letter highlighted "just how sloppy the Government's use of money has become".

Willis said the package was "put together sloppily," and eligibility checks had only been strengthened "following the Auditor-General's intervention".

"To this day we do not know how many ineligible people have received this payment," Willis said.

Willis said the Government has a "moral obligation" to find out how many ineligible people had received the $814 million payment.

"Lessons have to be learned," Willis said.

"What we saw with this payment was a rush and a hurry and a panic with no care for the consequences. money has gone to people who were not eligible for it," Willis said.

"I want to see the Government apologise for the rushed way they put this together. They have a moral obligation to answer," she said.