By Tess Ikonomou in Canberra

Labor has bowed to mounting pressure and has scrapped a planned $5000 cap on veterans’ allied health payments.

Following weeks of sustained criticism, Veterans’ Affairs Minister Matt Keogh announced on Thursday the government had backed down on the measure.

In a bid to improve the budget’s bottom line, the government introduced a $5000 annual limit on allied health services for veterans, originally set to come into effect from July 2027.

The proposal attracted widespread condemnation from across the parliament, with the coalition, Greens and crossbench all calling for Labor to dump the cap.

A group of veteran-advocacy groups also teamed up to urge the government to backtrack.

Announcing the move, Mr Keogh said in a statement the government “has a deep respect for our veterans who have, and who continue to serve our country”.

“Anyone who pulls on our nation’s uniform to serve in our name deserves nothing less,” he said.

“We have been consulting on this measure and we have heard from veterans there are concerns about this approach.

“We have been listening carefully and today, the government is taking the proposed $5,000 threshold off the table.”

Opposition Leader Angus Taylor said the decision was great news for veterans.

“Veterans shouldn’t have to fight for their healthcare,” he posted on X.

“Nothing signals warped priorities more than a government that’s so desperate to find savings it goes after our veterans.”

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