Australian PM Malcolm Turnbull has agreed to further relax the rules for New Zealanders in Australia to get residency and citizenship.

The 'Pathway to Citizenship' announced by Turnbull last year is due to come into effect this year, but only applies to those who arrived in Australia between 2001 and 2016 and who earned more than about $57,000 for five consecutive years.

After a meeting in Queenstown today, Turnbull and English announced the rules had been made more flexible to allow for those who had breaks in employment because of injury or to be a carer.

Turnbull had refused to budge on the 2014 law which had seen New Zealand-born people who had served more than 12 months in prison deported back to New Zealand.

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A Commonwealth Ombusdman report last month was critical of the process used, including the length of time New Zealanders were being held in detention centres such as Christmas Island while their appeals were decided.

Turnbull repeated his promise to conduct the process "sensitively" - he has previously promised to try to expedite the appeal process and take into account the community links a deportee had.

Some of those deported had lived in Australia since they were young children.