The Prime Minister didn't know Paula Bennett was going to announce a $5000 incentive to get people to move out of Auckland.
The day before last week's Budget, the Social Housing minister publicised the plan which seemed to also catch the Finance Minister on the hop.
Under the policy, a $5000 grant would be available to anyone currently in a state house or on the waiting lists, including retirees.
They would be voluntarily moved into other areas such as Lower Hutt, Ngaruawahia or Huntly.
It is an extension of the Government's previous 3k to Christchurch programme in which it paid beneficiaries $3000 to move to Christchurch for work.
At his post-Cabinet news conference this afternoon, Mr Key said he knew work had been done in the area, but didn't know when an announcement would be made.
"The exact timing of it, I wasn't aware she was going to do it that particular day but it was discussed by Cabinet in the early part of this year.
"It was part of the overall view she held that we could do that. It's a pretty small amount because it's 1500 people and $750,000 so quite within her delegations," he said.
His office later clarified the figure was 150 people, not 1500.
While Cabinet didn't sign off on that particular plan at the time, it agreed on the "broader principle of an extension of this kind of financial inducement".
Finance Minister Bill English was also unaware of the announcement when asked on the day it was made.
"I don't know what you're referring to, to be honest," he said.
"Well I wasn't aware of the announcement today but that's not a big deal. I'm not aware of a lot of announcements."
At the time, Ms Bennett defended the announcement, saying the portfolio was her responsibility.
The plan was criticised by Mangere Budgeting Services Trust chief executive Darryl Evans who said it wasn't a long-term plan and ran counter to the Work and Income policy not to pay benefits to people moving to small towns without realistic job prospects.
The areas used as examples of where people could move also surprised him because those were places already hit by poverty.