Prime Minister John Key says he is more concerned about the fact that former Education Secretary Lesley Longstone did not gel in her position than the size of her severance payout.
Mrs Longstone, who moved from Britain, quit after 13 months in the job and has been paid $425,000.
Mr Key said a significant amount of that was part of Mrs Longstone's contract and the rest would be the bare minimum negotiated as a severance payout.
He said a relationship breakdown with Education Minister Hekia Parata was not the only issue and it is hard to pinpoint why Mrs Longstone's appointment did not work.
Mr Key said the ministry is in a much better space now with Peter Hughes as acting secretary.
The Post Primary Teachers' Association said the payment is a kick in the teeth for teachers missing out on pay because of problems with Novopay.
PPTA president Angela Roberts told Radio New Zealand's Morning Report programme on Wednesday the timing of the payout package was unfortunate when many teachers wake up on pay day not knowing if they will be getting the right amount.
Ms Roberts said schools are told consistently that there is no money in the education sector and are struggling to make the most of every dollar.