Tony Abbott stripped Kevin Rudd of travel entitlements he had granted his prime ministerial predecessor just one month prior, documents show.
But the Prime Minister's office defended the action on Tuesday night and said the Coalition had simply unwound special deals cooked up by the Labor Party.
Under the current system, new prime ministers are allowed to set the benefits awarded to their predecessor.
Mr Abbott continued this tradition in October and allocated Mr Rudd generous allowances that had previously been boosted by Julia Gillard.
But a month later he revoked the more generous perks, when Mr Rudd finally quit the Parliament.
Days after knifing Mr Rudd as prime minister, Ms Gillard awarded him access to a travel allowance, an extra staff member for 12 months and granted his staff unrestricted travel. Mr Rudd returned the favour when he deposed her last year.
Mr Abbott's office hit out at the "special rules" and said the Prime Minister had not wanted to "perpetuate" them.
A spokesman for the Prime Minister said Mr Abbott granted Mr Rudd "standard entitlements" which in some cases were "more generous" than those granted to former prime ministers Bob Hawke, Paul Keating and John Howard.
Mr Abbott initially matched many of the extra entitlements the Labor leaders awarded themselves in a letter sent from Mr Abbott to Mr Rudd in October.
Mr Abbott told the then backbench MP he would allocate him unlimited domestic travel for official business, a travel allowance, and an adviser "for the period [Mr Rudd] remained in Parliament" on top of his electorate staff, but stripped Mr Rudd of two advisers.
In his official letter, Mr Abbott said to Mr Rudd "once you leave the Parliament, the additional position and the other entitlements would cease and arrangement would be made to provide a revised package of entitlements".
At that time, Mr Rudd had not decided whether or not to leave Parliament but when he announced his departure from politics a month later, Mr Abbott slashed the former prime minister's perks bringing them into line with those enjoyed by former Liberal prime minister Howard, just over a month after signing off on more generous arrangements.
Mr Abbott's office said the different treatment was "in recognition of his status as a former prime minister" still in the Parliament.
In November, after Mr Rudd quit politics, Mr Abbott capped his travel, cut his travel allowances and slashed his permanent office staff to two.
Another position was made temporary and is about to expire, while the fourth position was made into a driver's job.
Mr Rudd's domestic travel has also been restricted to 40 business class flights a year and he is no longer allowed to claim an allowance when travelling.
Mr Abbott also introduced a cap on staff travelling with Mr Rudd – restricting their entire transport, accommodation and away-from-home allowance to $15,000 a financial year. This was not previously capped in the October arrangements.
A spokesperson for Mr Abbott said the entitlements were in line with what former prime ministers have received in the past.
The spokesperson said: "Prime Minister Abbott approved entitlements for former prime ministers Rudd and Gillard based on long-standing practice for retired PMs and the advice of the Department of the Prime Minister and Cabinet."
The Belcher review published in 2010 found "while each former prime minister's entitlements are individually determined by the incoming prime minister, they have come to be largely uniform in nature" and recommended "that a legislated head of authority be created to provide benefits to former prime ministers".
