The arch-Remainer and former Deputy Prime Minister was allowed to claim from the account after he lost his seat in Government in 2015.
The money is dedicated funding for the office and secretarial costs of former British leaders, arising from the unique position they occupy in public life.
Mr Clegg claimed £114,982 from the allowance in the year 2016-17, and is currently set to claim similar amounts until 2020, the Sunday Times reports.
His allowance was approved for five years, but is subject to an annual review, and could be extended.
However a senior Cabinet Office official recommended he should be given a reduced rate in an internal memo.
Sue Gray, director-general of the propriety and ethics team at the Cabinet Office, said the expenses should be “set at a lower level” as there were was a “difference in roles and responsibilities between the PM and DPM”.
Although Ms Gray is one of Britain’s most senior civil servants, the Government did not follow her advice. The final decision will have rested with the cabinet secretary, Sir Jeremy Heywood.
Mr Clegg, who became Sir Nick in the New Year’s Honours, served as deputy prime minister from 2010-15 in David Cameron’s coalition Government.
He lost his Sheffield Hallam seat in the Commons to Labour’s Jared O’Mara in 2017.
Former prime ministers who also claim the allowance include Sir John Major, Tony Blair, Gordon Brown and David Cameron.
The Cabinet Office said: “The public duty cost allowance was introduced to assist former prime ministers, still active in public life. It was extended to the former deputy prime minister for five years.”
A spokesman for Mr Clegg said he was unaware of Ms Gray’s view, adding: “The money he receives is spent entirely in line with its stipulated purpose — to provide administrative and operational support to a former deputy prime minister. Not a penny goes to Sir Nick personally.”