The Australian government has abandoned plans to impose a $5,000 cap on allied health services for defence veterans, yielding to mounting political pressure after weeks of criticism from opposition parties, veterans groups, and independent senator Jacqui Lambie.
The measure, which was scheduled to take effect on 1 July 2027, has been officially withdrawn, according to a statement from Veterans' Affairs Minister Matt Keogh on Thursday. The decision follows a sustained campaign against the policy that began after its announcement in the May federal budget.
Government reverses course after consultation
Keogh confirmed the reversal in a statement, acknowledging the concerns raised by veterans. "We have been consulting on this measure, and we have heard from veterans there are concerns about this approach," he said. "We have been listening carefully and today, the government is taking the proposed $5,000 threshold off the table."
The Labor government had introduced the policy to eliminate the requirement for veterans to obtain a new doctor's referral for allied health services every 12 sessions. Under the original plan, veterans requiring funding beyond the cap would still have been able to apply for additional assistance.
Keogh had faced intense criticism from veterans and the Coalition after initially refusing to meet with a group of former servicemen who were lobbying for the cap to be scrapped. Opposition leader Angus Taylor has called on Prime Minister Anthony Albanese to dismiss Keogh from his role.
Lambie's personal appeal and victory statement
Senator Jacqui Lambie, who had shared her own health struggles in an impassioned Senate speech last month, welcomed the decision. Lambie had publicly detailed her experience with prolapse and criticised the lack of women's health services for veterans, warning that the cap would have "devastating impacts" on those affected.
"This cap was cruel, it was dangerous and it should never have been announced in the first place. I'm relieved that the government has finally listened and scrapped it and I thank them for doing it," Lambie said in a statement on Thursday. "This win belongs to every veteran, family member and Australian who spoke out, lobbied the government, signed the petition and kept the pressure on. They knew what would happen to our most vulnerable veterans if this cap went ahead and they fought like hell to make sure it didn't."
Coalition and veterans groups respond
Opposition leader Angus Taylor condemned the cap as "egregious" and criticised the government's handling of the issue. "This was a mistake from the start. It should never have happened," Taylor said. "These are people who are prepared to put themselves in harm's way for our country, serving our country. This is a government that has had its priorities wrong from the moment we saw the budget. The budget is unwinding before our eyes."
John Armfield, spokesman for the Fair Care for Veterans campaign and a former Navy clearance diver, thanked Keogh for the backdown. "This is what happens when a government listens to veterans," he said. "Veterans, families and doctors came from all over the country to say one thing: this cap would only ever hurt the most badly injured. Today the minister agreed, and we thank him for it. Nobody had to lose for this to happen. The minister made the right call, and he deserves credit for it."
The reversal marks a significant victory for the veterans community and their advocates, who argued that the cap would disproportionately affect those with the most severe injuries. The government has not indicated any alternative measures to replace the proposed cap.
