New Zealand First leader Winston Peters says a charity that received nearly half the money the party was found to have mis-spent at the last election, is a deserving case.
Instead of paying back the $158,000 of parliamentary money, the party opted to donate it to charities.
Mr Peters says $78,000 has been paid to a trust to benefit Susan Couch, a survivor of the Mt Wellington-Panmure RSA killings in 2001, and other victims of crime.
Ms Couch is suing the Corrections Department for failing to monitor triple murderer William Dwane Bell while on parole.
Mr Peters says the state failed Ms Couch and the party wanted to help her.
"We intended to give this money all to charity - worthy charities - and she's an enormously worthy one, someone who's dramatically let down by the state. She was left for dead, she leads a very very difficult life, and the party's sought to help her."
He says nine other charities, which he did not name, also received money.
National, Labour comments
Labour Leader Helen Clark says the donation is a New Zealand First matter, and she does not want to comment further on its decision.
"....Labour took its own decision about what to do with that issue. It's for New Zealand First to work out where it fares in the court of public opinion with what it's done."
National Party Leader John Key says the money should have been returned to the taxpayer.
Mr Key says while he has no problem with the charity the money has been given to, that is not where the cash should have gone.
"Quite honestly, the ruling that was made was that money was taken off the New Zealand taxpayer inappropriately; spent when it shouldn't have been, and it's not really for Winston Peters to decide whether it goes to charity. It should have been returned as Labour did, returned their $800,000 that they temporarily borrowed off the New Zealand taxpayer."
The Susan Couch Crime Victims Charitable Trust will raise funds to buy the mother-of-one a house and help others in a similar plight.
Ms Couch was seriously injured in 2001 when Bell broke into the Mt Wellington-Panmure RSA and attacked her and three others during a robbery.
In 2003, Bell was convicted of murdering three people at the RSA and the attempted murder of Ms Couch. He was jailed for a minimum of 30 years.
Ms Couch is now a social welfare beneficiary and will never be able to work again.
Lawyer Brian Henry says as Ms Couch was working part-time when the attack happened in 2001, she was ineligible for full compensation from ACC.