Convicted killers Antonie Dixon and Joseph Samoa received more than $200,000 each in legal aid last year - and the money is "very unlikely" to ever be repaid.
The huge sums have led to renewed calls for the legal aid system to be reviewed.
The cases of Samoa and the Samurai sword-wielding Dixon were among the top ten legal aid files closed off by the Legal Services Agency in 2005.
Dixon was sentenced to life imprisonment last May for fatally shooting one man and wounding two women with a sword during a drug-fuelled crime spree.
Samoa was jailed for a minimum of 22 years for the killings of Pakuranga pizza worker Marcus Doig and Mangere Bridge bankteller John Vaughan in 2002.
Other cases - including that of former Christchurch creche worker Peter Ellis and serial rapist Malcolm Rewa - also had legal aid grants worth hundreds of thousands of dollars closed off last year.
But the year's two biggest totals were for civil cases.
Garth McVicar of the Sensible Sentencing Trust said a total "review and rethink" of the legal aid system was required. The public was "hugely frustrated" with large legal aid grants going to repeat offenders, he said.
He suggested the Government implement a 'sliding scale' for legal aid, giving full coverage to first-time offenders but drastically restricting the eligibility of recidivists.
Legal Services Agency grants manager Robyn Nicholas said whether to put a cap on legal aid grants was a policy decision for the government.
She said the agency was bound by legislation to operate the system in the interests of justice. "If a person is being prosecuted for something, they have a right to a defence. They either pay for that defence themselves or if they don't have sufficient means...then the state will pay."
The guilt or innocence of a defendant and any prior convictions were irrelevant when it came to their eligibility for aid, she said.
The LSA gives out around 61,000 legal aid grants each year. The average legal aid payout for a criminal case is $995 and the average cost of a civil case is $3392.
An amendment passed by Parliament in March broadened the eligibility criteria for receiving legal aid.
The costs of a case depended on factors including the hearing time, how much preparation the lawyer had to do, how the prosecution was conducted, how witnesses were used, what evidence was presented, and how complicated the case was, Ms Nicholas said.
Whether a grant has to be repaid depends on the assets and income of the recipient. At the same time as the agency decides whether to grant aid, it decides whether it will require the recipient to re-pay it.
Ms Nicholas said in the cases of criminals such as Dixon or Samoa, it was "very unlikely" they would re-pay the money. "With people like that it's unlikely we would even set a contribution," she said.
She said the agency only required a contribution in a small percentage of cases, because most people who went through the justice system did not have the disposable income or assets necessary to make repayments.
But Mr McVicar said the free-flowing availability of legal aid worked against the interests of justice. The legal aid "gravy train" offered lawyers an unlimited fund they could milk by delaying court proceedings and launching unwarranted appeals, he said.
At the same time as the legal aid system is under fire for these hefty payouts, it is also facing criticism from within the legal profession for not being generous enough.
Auckland District Law Society president Gary Gotlieb this month announced he was abandoning legal aid work because the rates were too low. He said the legal aid system was "ready to fall apart".
That same week, the LSA came under fire from a parliamentary select committee, again over its low pay rates.
The single largest grant closed last year went to former Otahuhu probation officer Chris Gilbert who won a landmark employment case against the Corrections Department in 2000. He has fully repaid the grant.
Thousands of taxpayer's dollars spent defending killers
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