The Vice-Chief of the Defence Force has told Checkpoint he does not know whether a naval officer made redundant, and then rehired permanently, will have to give back redundancy pay.
In the last year 485 jobs have been disestablished, 295 of which were military personnel, in a bid to save up to $400 million a year by 2014/15.
Rear Admiral Jack Steer says the Defence Force had made a mistake making two people redundant and then re-hiring them - one temporarily and one permanently.
Senior Defence Force staff were questioned over the savings programme from opposition MPs at a select committee in Parliament on Thursday.
Rear Admiral Steer told the committee the move was part of the first stage of civilianising uniformed personnel to save money.
He says the two people were paid redundancy but the Defence Force subsequently realised it had made a mistake and re-hired them.
On questioning from the Labour Party foreign affairs spokesperson, Phil Goff, Rear Admiral Steer said the redundancy money would not have to be paid back. He could not give a figure on how much was paid out.
Rear Admiral Steer said the Defence Force has had a tough year, with loss of life among its personnel.
He says morale is low and attrition is higher than usual at 19%.
The Defence Force needs to reach a $350-$400 million annual savings target by the 2014/15 financial year.
Rear Admiral Steer says it is on track to make those savings and in that time frame and expects to have saved $143 million this financial year.
About 500 jobs have been disestablished as part as the cost-saving measures and a second tranche of civilianising uniformed jobs is expected in the next few months.
Rear Admiral Steer told the select committee that about 130 people will be affected by this next stage of reform.
Overseas recruitment drive
Despite laying off staff the Defence Force is spending thousands of dollars on recruiting personnel from overseas.
Later in March three personnel from the Defence Force will go to Britain on a recruitment drive.
Director of defence strategic recruiting Squadron Leader Kavae Tamariki says the trip will cost $35,000 dollars.
Squadron Leader Tamariki says the defence force will not be recruiting into any of the trade or rank groups where personnel were made redundant.
