Budget 2021: Veterans given extra mental health support, Veterans Affairs Department to grow by 450 staff

The Department of Veterans' Affairs will receive an additional $302.8 million over the next four years from July to help process rehabilitation and compensation claims with more than a third of that amount dedicated to improving the agency's data and technological capabilities.

A total of more than $150 million in funding will also be given to health services and mental health support, including and support for the families of veterans.

It comes as a new royal commission into veteran suicide was announced following criticism the government had been failing to support veterans once they had left the military.

Veterans' Affairs Minister Darren Chester said on Tuesday the inquiry would help to identify the causes and prevent further harm.

"The Royal Commission will provide an important opportunity for healing and to rebuild trust, unite our veteran community, and restore hope," Mr Chester said.

"Sadly, too many veterans have lost their lives to suicide ... however, we must continue the work that we're doing already, work that is already saving lives."

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Compensation applications submitted to the Veterans' Affairs Department have also doubled in recent years, causing a growing backlog of claims and resulting in lengthy wait times.

Mr Chester said he acknowledged the frustration veterans and their families and said the extra money and resources would help to reduce the time frame.

"As I have spoken to veterans and families around the country, one of their biggest concerns has been claim waiting times and as a government we are committed to addressing this issue," Mr Chester said.

"This will support the health and well being of veterans and their families as claims are processed more quickly and efficiently."

The average staffing level at the Veterans' Affairs Department will also be increased by more than 400 spots to 2062 employees.

The staffing cap policy, first introduced by former prime minister Tony Abbott, restricts agencies from exceeding staff levels past those held in 2006-7. Labour hire staff are instead used to temporarily cover workload increases.

The Community and Public Sector Union has long criticised the department over its strong dependency on contracted staff. An analysis by The Canberra Times in January revealed 42 per cent of department staff were not APS employees.

In a Senate estimates appearance in March, Veterans' Affairs secretary Liz Cosson admitted the department's reliance on labour hire to fill in the gap was not sustainable.

The government also committed an additional $32.1 million to be put toward Anzac Day commemoration services and the ongoing maintenance of Australian war graves.

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