Cost of caring for veterans climbs to $13 billion

The nation’s veterans will receive more than $13 billion owed to them for their service and to offset a growing number of debilitating health conditions as a backlog of claims for assistance is cleared.

This masthead can reveal the single-year cost to taxpayers of the federal government dealing with more than 60,000 claims left unprocessed by the Morrison government will next year surpass assistance to state government-run public schools.

A dawn service at Melbourne’s Shrine of Remembrance. Thousands of veterans are sharing in $13 billion in extra, but delayed, compensation and health payments.Credit: Jason South

This month’s mid-year budget update revealed an extra $1.8 billion for veterans’ medical claims and compensation over the next 3½ years.

But the total cost of assessing veterans’ claims since the government took office will, by 2027-28, be at least $13.3 billion more than had been forecast when the Morrison government lost office in 2022.

In three years, the blowout in veterans’ assistance was 36 per cent, one of the single biggest increases in expenditure of any part of the budget. The blowout to the National Disability Insurance Scheme, by contrast, has been 13 per cent over the same period.

In its last budget, the Morrison government had expected to spend $6.8 billion on veterans and their dependents in the 2025-26 financial year. The figure will instead be closer to $12.7 billion due to the vast number of delayed claims that have been cleared. It will total more than federal assistance to state government-run public schools.

On coming to office, the Labor government started replacing labour-hire workers within Veterans’ Affairs with public servants, which has sharply reduced the time taken to process claims.

Outstanding claims have been cleared even as there has been a jump in the number of veterans presenting with multiple health issues that need assessment.

Veterans’ Affairs Minister Matt Keogh said the government had, by investing in the department, cleared a huge backlog of claims and given financial support to veterans.

“Under the Coalition, the Department of Veterans’ Affairs (DVA) was underfunded and under-resourced. Under-resourcing of DVA has meant veterans haven’t been receiving the payments or medical services they need and deserve quickly,” he said.

“By funding DVA properly, we’re processing claims faster, which has a consequence on the budget, but we don’t apologise for ensuring our veterans receive proper compensation and support.”

In 2021-22, there were 53,508 compensation claims determined by the Veterans’ Affairs Department, but the backlog of claims that had not been examined stood at 66,000.

The lag was a major complaint from veterans, who coined the term “delay, deny, die” to describe the system, with the government accused of delaying the start of processing a claim, then denying the initial claim, with the veteran likely to have died before they could be paid what they were owed.

The Coalition has signalled it would cut into the public service, saying that under the government there had been a 36,000 increase in the number of bureaucrats. Hundreds of them have gone into Veterans’ Affairs, replacing the labour-hire workers used under Morrison.

Veterans’ Affairs Minister Matt Keogh.Credit: Alex Ellinghausen

But in findings that would make it politically difficult for the Coalition to slice public servants from the veterans’ sector, the final report of the Royal Commission into Defence and Veteran Suicide found the Veterans Affairs’ Department had been “insufficiently resourced to process claims in a timely manner”.

“While the number of claims lodged has increased substantially in recent years, this was not
matched with a commensurate increase in departmental funding and claims processing staff on hand, contributing to a large backlog of unassessed claims and unacceptably long processing times,” it found.

The royal commission drew a direct link between the faster processing of claims and the mental and physical health problems faced by veterans.

“These reforms would directly improve client experiences and address some risk factors for worsening mental health and suicide,” it found.

Shadow treasurer Angus Taylor signalled the Veterans’ Affairs Department was likely to be spared from public service cuts.

“We have consistently said we will guarantee the essential services that Australians rely on, including for veterans and their families,” he said.

By September this year, claims from more than 17,300 veterans from the war in Afghanistan with a combined 88,258 health conditions had been assessed, while another 10,436 veterans from Iraq have 48,431 conditions.

In some cases, veterans have served in more than one conflict.

The health problems include tinnitus, hearing loss, post-traumatic stress disorder, degenerative back injuries, depression, alcohol and drug abuse and anxiety.

Almost 19,000 veterans from Afghanistan, Iraq, Solomon Islands and East Timor are dealing with tinnitus alone, while 12,353 have suffered hearing loss.

In 2021-22, each veteran’s assistance claim covered an average of 2.7 health issues. From July to November this year, the average was 4.6.

If you are a current or former ADF member, or a relative, and need counselling or support, you can contact the Defence All-Hours Support Line on 1800 628 036 or Open Arms on 1800 011 046. Crisis support is also available from Lifeline on 13 11 14.

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