Melbourne man Peter, who regularly begs for change on Collins Street, was completely unaware he'd had a brush with Malcolm Turnbull on Wednesday. That was until he woke up the next day.

"I saw you in the paper! You're famous!" came the comments from people who know the man with the beanie who sits outside luxury Italian fashion store Bulgari.

Peter (who did not want to give his surname) then realised the identity of the fine-suited individual who had stopped briefly to place $5 in his cup. It was none other than the leader of the country.

A photo of the interaction was posted on social media and later published in the mainstream press.

"I didn't know who he was, to be honest," said Peter. "He gave me $5, said 'Have a nice day', and that was basically it.

"It just happened so fast, and I saw all these people walking behind him."

The Prime Minister has copped criticism on social media from those who said he was "stingy" in his charity, for such a wealthy man.

The act also put him at odds with Melbourne's lord mayor, who says giving money to people on the street entrenches homelessness.

However, Mr Turnbull defended his act as a "human reaction" when challenged by 3AW radio host Neil Mitchell.

The Prime Minister has form when it comes to the issue.

In January, Mr Turnbull stopped to talk to homeless man Kent Kreswell, 50, further up Collins Street and placed $10 in his tray.

Mr Kreswell said on Friday he was surprised at the time to look up and see cameras snapping him. He thought it opportunistic of the Prime Minister, but appreciated the gesture.

"I don't think he really cares about us," he said. "It was just a photo opportunity, for sure."

Mr Kreswell, who has been on the street for more than a year, said he used the PM's money to buy a Subway sandwich and a coffee. If it were not for the generosity of others, he would never be able to afford a room at night, he said.

Peter has mixed feelings about his encounter with political power this week. The former Dandenong resident has been homeless on and off for five years, since his family home was sold out from under him.

He said he would rather have had $10 than $5. "It's a little stingy because he's a millionaire, but that's OK," he said. "It's his money and he worked hard for it."

Peter said nobody had asked permission to take his photograph or publish it. He would have declined if given the choice.

"I'm not really happy about that," he said. "I'm camera shy. It's an invasion of privacy; I should have been told."

So what did Peter buy with the Prime Minster's $5? A sausage roll and a coffee for lunch.