The Returned and Services Association says a government grant of $150,000 will help support its frontline services.
The welfare arm of the RSA received $250,000 for four years beginning in 2008, but last year that funding was eliminated.
This week, the Government said it would give another grant of $150,000.
The New Zealand First party says the $100,000 reduction is not fair on an ageing veteran population and wants the grant returned to its previous level.
But the chief executive of the RSA says the economic climate in 2008 was much different, and it recognises there are many needs on taxpayers' money.
Stephen Clarke says the grant can go a long way to support frontline services for veterans and training volunteers.