$203 million crackdown on dodgy doctors and advocates targeting veterans

Fraudsters taking advantage of the NDIS have spread to targeting veterans, harming former service people and driving up the cost of veterans' payments.

The government has spent the past three years clearing a backlog of veteran compensation claims, but the half a billion dollars invested into the scheme has also made it a honey pot for bad actors.

Dodgy doctors have been caught submitting false medical reports, receiving payments for failed claims and unnecessary tests, while profiteering "advocates" are preying on veterans, exaggerating claims and sometimes snagging as much as a quarter of veterans' lifetime compensation as a "fee". 

In response, the federal government will announce a $203 million crackdown on "bad actors" abusing the veterans scheme, which will include funding for free advocates to help navigate the complex system.

Veterans Affairs Minister Matt Keogh said money for stricter auditing of medical reports would shut out shameless doctors and allied health professionals "taking the names of veterans in vain" and defrauding the Department of Veterans Affairs (DVA).

"They're saying they are providing a service to someone and not providing it, or they are billing for services that are different to the types of service that are actually provided, or they are doubling up on claims," Mr Keogh said.

"We are processing claims a lot faster now than what was being done historically. If that's attracting bad actors in we need to make sure … that we have got the proper integrity measures in place."

In a recent case, a woman running an occupational therapy business in Perth allegedly submitted more than $7 million worth of fraudulent treatment claims to the DVA, allegedly making claims over several years that did not match services provided.

Similar behaviours were found in the NDIS, where false reports were filed or clients charged for services not provided, until the government reformed the scheme in 2024, tightening up approved activities and improving fraud detection.

Since those reforms the Australian Criminal Intelligence Commission has warned the "footprints" of fraudulent NDIS providers have been spotted in other payment programs.

Mr Keogh said the vast majority of medical professionals and advocates helping veterans were decent people but some bad actors seemed to be operating "across government systems".

He said if additional funding to speed up veteran claims had attracted fraudsters, then the government would respond.

"That's something we're alive to," Mr Keogh said.

"So if people who have been trying to play systems in the NDIS or in other schemes the Commonwealth operates, they will not be able to do that in the DVA.

"That's why we're stepping up our integrity measures to remove them from the system. 

"If there are bad actors out there we want them out, and we will throw the book at them if we catch them defrauding this system, which is hurting veterans."

Fraud crackdown, as minister consults on possible laws

The minister has also flagged reforms to end profiteering fee-for-service advocacy services, who claim they will help veterans to receive their deserved payments, only to snag commissions as large as 29 per cent of the payment they eventually receive.

A recent inquiry into these advocacy services heard that some were charging veterans massive commission-based fees, taking huge chunks of compensation payments meant to last a veteran's whole lifetime.

Veteran advocacy was typically a free service provided by groups like the Returned Services League (RSL) to help people navigate a complex payment scheme.

But a cottage industry of profit-based advocates has developed in recent years as the government has invested more money into the payment.

And unlike tax or migration agents, veterans advocates are largely unregulated.

The number of veterans claims has shot up in recent years to more than 100,000 a year — and last year the number of claims being submitted by commission-based providers doubled to become one in five of all claims.

The department has warned claims are also becoming more complex, in part because of exaggerated claims submitted by advocates with "business models designed to manipulate and exploit the claims process to maximise corporate profits".

The RSL, which funds advocates to provide free services to veterans, have called for fee-for-service advocates to be banned.

Mr Keogh said he would soon begin consulting on reforms to protect veterans from predatory advocacy services.