Labour Party defence spokesperson Phil Goff is accusing the Government of being mean-spirited by not extending the War Pension to all veterans, saying it's a badge of pride for them.
Only veterans who have a significant disability receive the war pension.
The Government refused to extend it when the the Veterans Support Bill was reported back to Parliament on Thursday.
Mr Goff says the pension only provides small benefits on top of New Zealand Superannuation and would cost an extra $11 million this year if was extended to all veterans.
"The most important thing for them actually is the fact that they can say they are on a veterans' pension. It's a matter of pride for them and it's an expression of gratitude by us to give them those extra small benefits."
Mr Goff told Radio New Zealand's Morning Report programme on Friday with the commemoration of Word War I this year, "it's an opportunity for a thank-you from a grateful nation."