Veterans' Affairs Minister Matt Keogh introduced legislation on Wednesday that would roll three laws into one to streamline the process for veterans and families making claims.
The proposal was the first recommendation of an interim report of the royal commission into defence and veteran suicide.
The inquiry found the complex compensation claims process had harmed people's mental health.
Mr Keogh said the simplification of the claims process would alleviate much of the stress and anxiety veterans experienced when lodging claims.
The legislation changes were recommended by the Royal Commission into Defence and Veteran Suicide. (Joel Carrett/AAP PHOTOS)
"The royal commission found that the veterans entitlement system is so complicated that it adversely affects the mental health of some veterans," he told parliament.
"This legislation is a significant step in ensuring a better future for defence personnel, veterans and families,."
Mr Keogh said veterans and families would be able to get much-needed support faster and without as much red tape.
The royal commission recommended the legislation be in place by July 2025.
However, the bill put forward by the government will kick in a year later than recommended when it comes into effect in July 2026.
Mr Keogh said veterans would not have to lodge duplicate claims with the department in order to receive support.
"The changes will also hugely simplify the training, processing and knowledge burdens on claims advocates and (Department of Veterans' Affairs) staff."
Mr Keogh said the changes would directly and positively affect veterans by allowing the department to be well positioned to focus efforts on vulnerable claimants.
Veteran's Affairs Minister Matt Keogh will introduce the legislation changes to parliament. (Mick Tsikas/AAP PHOTOS)
Under the changes, benefits from existing schemes will continue unaffected, with fresh claims to be covered by the new legislation.
Labor delayed the implementation schedule as it sought feedback from veterans on the changes, and to give people enough time to learn the new framework while making system upgrades.
Department of Veterans' Affairs projections in the 2024 federal budget show payments for rehabilitation and compensation claims are expected to grow by $6.5 billion over the next five years.
More than 500 extra staff were hired to clear a huge backlog, which at its peak in late 2022 reached 45,000 in the queue.
Fresh claims are now being dealt with in a two-week period, and for some veterans, support is being provided in less than two months from the date of lodgement.
The royal commission will hand down its final report in early September.
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