New Zealand First leader Winston Peters has dismissed Whanau Ora as a waste of taxpayer's money, after $3000 was paid towards the cost of a family reunion.
Mr Key says the Whanau Ora Minister, Tariana Turia, does not accept that it was a family reunion.
Mr Key says if families are to be empowered, they have to get together.
He says Whanau Ora is a new programme, and in the fullness of time it will be reviewed.
The man Mr Peters was was talking about, Johni Rutene, says the $3000 Whanau Ora grant is to cover the cost of two hui, where his wider family can discuss a formal plan to improve their lives and their health. He says he sold his three barber shops last year and his family is genuinely in need of help.
But Mr Peters says the grant should not have been approved because Mr Rutene is a successful business man.
After asking the Prime Minister a question in Parliament, he criticised Whanau Ora as a complete waste of money.
According to Te Puni Kokiri, the Whanau integration, innovation and engagement fund is to strengthen whanau connections, and build capability, skills and knowledge.
Mr Peters says the fund has made 200 grants, totalling about $6 million.
He told Morning Report the programmes are elitist and separatist.
However, Whanau Ora Minister Tariana Turia defended the programme.
She said Whanau Ora does not fund reunions and that if families have problems, it's important that they are able to come together to sort them out.
Mrs Turia said plenty of state agencies have intervened in the lives of many families involved in the scheme, but they have not been successful.