The Taxpayers' Union says it will invoice Greens' co-leader Metiria Turei at least $57,000 for the money she gained by lying to Work and Income (WINZ) when she was a solo mum in the 1990s.
Ms Turei made the confession on Sunday when she was highlighting "grinding poverty" in New Zealand and unveiling a policy to increase benefits by 20 percent.
There has been some dispute over how much Ms Turei would owe, given that the events happened more than 25 years ago.
Legal expert Graeme Edgeler said that the maximum possible accommodation supplement in 1993 was $50 per week. This would amount to far less over three years than the figure calculated by The Taxpayers' Union.
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Ms Turei said she will cooperate fully with WINZ and pay back the money if asked, but she has no interest in responding to the Taxpayers' Union.
"It's a political stunt by them," she said.
She told her party's annual conference she had so little money while she was a solo mother and a law student she didn't tell WINZ her flatmates were helping her pay the rent for fear her benefit would be cut.
Ms Turei hasn't given any details of how much she was receiving at the time, but the Taxpayers' Union says that converted into today's dollars the domestic purposes benefit would be about $366 a week.
"Ms Turei mentioned in the media her fraud lasted three years, that's at least $57,096 she owes taxpayers," the union's executive director, Jordan Williams, said.
"Ms Turei is in the top one percent of income earners and has been for many years. She should pay the full amount back regardless of whether she is charged for breaking the law.
"She must pay the money back before she can have any credibility as an MP."
Auckland Action Against Poverty advocate Alistair Russell told Newshub the Taxpayers' Union is embarking on a "witch hunt" and its figure is absurd.
"The figure is simply ridiculous, yet another attempt by a right wing organisation to beat up on beneficiaries past and present."
He said Ms Turei would have received the Domestic Purposes Benefit regardless of whether she had flatmates, and under the accommodation supplement rules she had the right to have up to two boarders. Mr Russell said the rent paid by the boarders would not have been considered income by WINZ.
"What Metiria did 20 or so years ago is not relevant, what Work and Income is doing now is," Mr Russell said.
He said the dispute over the amount Ms Turei could owe is "Missing the entire point about the Green Party release on the need for Work and Income change, and a change to the entire culture around it."
The Ministry of Social Development won't say whether it will investigate Ms Turei.