The Labour leader said Mr Key's comments about people living in cars and refusing help from officials were not off-the-cuff remarks.
They were part of a Government strategy to downplay the problems related to Auckland's housing market, he said.
"The National Party are trying to diminish and deny the very idea that there is a homelessness crisis," he said.
"You had a New Zealand Herald article earlier in the week quoting Paula Bennett saying how MSD officials went with Auckland City Mission people to meet the homeless.
"It turned out that one official went with a security guard to the mission at dinnertime, which was a standard, routine visit."
Earlier today, The Salvation Army has accused Prime Minister John Key of making false statements about homeless people.
The organisation said this afternoon that Mr Key's incorrect claims had "deeply upset" some of the homeless people that the Sallies worked with and undermined the charity's ability to assist them.
The Government sent a "flying squad" of Ministry of Social Development (MSD) staff and NGOs to check on homeless people in Auckland this week and help them apply for social housing.
Mr Key said yesterday that some people who were approached in Bruce Pullman Park in Takanini on Monday night declined offers of help.
"MSD and the Sallies went around and knocked on eight cars that they could find," he said.
"All eight of those people refused to take support either from Sallies or MSD."
In a statement today, the Salvation Army said they turned down an offer by MSD to accompany them to the park, which was one of its regular visits to the site.
"[The Prime Minister's] statements are incorrect," the charity said.
"The Salvation Army declined the offer by MSD officials to accompany The Salvation Army as some of these people are very wary of Government officials.
"The results of this statement, as well as recent images of homeless people living in dire material hardship disseminated by the media, have deeply upset these people and have put the relationship between them and Salvation Army personnel in jeopardy, weakening the Army's ability to assist them."
The Salvation Army also said it did not knock on homeless people's car windows.
"It has a van from which food, water and toiletries are made available and where access to social services and advocacy can be arranged.
"The Salvation Army has spent years developing relationships and building trust with these people living on the outer margins of society -- people who often have a deep distrust of officials."
Information released by Social Housing Minister Paula Bennett's office this morning said that the "flying squad" of MSD officials and NGO staff visited 396 homeless people this week.
Of that total, 384 people were at the Auckland City Mission and 12 were in cars.
In all, 16 people chose to get help with their accommodation and seven people were being assessed for the social housing register.
A spokeswoman for Mr Key said his comments were based on advice that was given to him.
"The point he was making is that people have been approached and offered assistance and a large number of them have refused," the spokeswoman said.
