Prime Minister Christopher Luxon will no longer claim a $52,000 accommodation allowance for living in the Wellington apartment he owns - and will re-pay $13,000.

His U-turn came mere hours after he told media in Queenstown that he was entitled to claim the money. Earlier today it was revealed he was claiming an 11 per cent top up to his own $471,000 salary in the form of a $52,000 optional accommodation allowance.

The allowance is meant to pay for Luxon to find accommodation in Wellington. However, few prime ministers have claimed it - Luxon is the first in at least 34 years.

Speaking to Newstalk ZB’s Heather du Plessis-Allan this evening, Luxon said he was now going to return all the money he had received since becoming Prime Minister.

Luxon said the issue had become a “distraction” he did not want to deal with, so he had rolled back his defence of claiming the allowance.

He would pay back $13,000, which had only just been deposited into his bank account recently.

Speaking to reporters in Queenstown earlier today Luxon was adamant he was entitled to the allowance.

“As I came away [from a press conference] I thought ‘Wow, people are pretty fixated on the allowance’. I thought ‘what’s going on’.”

Luxon said he then listened to Newstalk ZB and heard the discussion on talkback.

He then changed his mind about the allowance.

“For me, I’m well within the rights, and well within the rules, but frankly it’s a distraction- I will live on my own costs,” Luxon told du Plessis-Allan.

Luxon said it would cost “millions and millions” of dollars to bring Premier House up to spec for him to live in.

“We’re trying to find a way to avoid spending millions and millions at Premier House. Obviously, it’s very difficult for us to think about how we spend that money, but we’re working through that.

“We know the house has long-standing maintenance and repair issues - It’s a 160-year-old house,” he said.

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