By Tess Ikonomou and Andrew Brown in Canberra

An extension of cash bonuses to keep defence personnel in the military will help provide certainty for Australia’s armed services, the veterans’ affairs minister says.

The federal government will expand a program providing $50,000 in bonus payments to military personnel to stay in the Australian Defence Force for a further three years after their initial period of mandatory service.

The bonuses were rolled out as part of a trial in 2023, but will be expanded as part of a $600 million workforce strategy under the 2024 Defence Workforce Plan.

The plan found the scheme had been a success, with an uptake rate of almost 80 per cent since its introduction, resulting in more than 3100 junior rank personnel choosing to stay.

“We’ve now got retention rates increasing and the separation rates back down to nine per cent, which is the long-term historical average,” Veterans’ Affairs Minister Matt Keogh told ABC Radio on Tuesday.

“We’re also expanding (the payments) so that people who are in the defence force who have served around seven to nine years will be able to sign on for an additional three years also, and they’ll be they’ll be able to get a continuation bonus.”

The bonuses will be extended until 2027/28, but the amount will be reduced to $40,000 from July 2025.

Mr Keogh said more still needed to be done to boost retention and recruitment rates for the military.

“There is a whole range of other measures that we have been applying to improve the terms of service for people in our defence force, from health care to study opportunities to improving housing flexibility,” he said.

Defence Minister Richard Marles said the expansion of the bonuses would target those who had been in the military for several years.

“(Retention) is a challenge. We are very much confident that we can meet these targets and that’s because we have properly funded them and we have a plan to get there which is about really improving the terms of service,” he told ABC TV.

“(The new bonuses are) really targeting those who are in their seventh, eighth, ninth years of service, which gets to the middle ranks where we’ve got an issue.

“We’re also working to grow the active reserves so there are more opportunities for people in the reserves to do full time or part-time work in the defence force.”

Defence will aim to achieve “realistic growth” of a permanent ADF workforce of 69,000 by the early 2030s, with an overall workforce – including public servants – of about 100,000 by 2040.

The plan says the goal is achievable and will be updated every two years as part of the national defence strategy cycle.

To “stabilise, remediate and grow” the ADF, the number of people signing up must increase from 5500 each year to 9000 over the coming decade.

The median length of service for permanent personnel must also jump from about seven years to 12.

Under the plan, Australia’s operational reserves would grow by an extra 1000 people by the end of the decade, which would play “an essential role in supporting the ADF’s readiness”.

“Defence will direct many of these additional operational reservists towards improving the readiness of the navy, air force, and Joint Capabilities Group,” it said.

The federal budget handed down in May showed the forecast workforce at 58,600 personnel by June 30, 2025, against a requirement of more than 63,000.