$740m veterans plan to fund social 'rehabilitation' and psychedelic treatments for PTSD

Yoga, surf therapy, cooking lessons and short education courses will be available to veterans under a $739 million expansion of the support system for former service people.

And new treatments, including MDMA and psilocybin for the worst cases of post-traumatic stress disorder (PTSD), will also receive funding for the first time, as well as medicinal cannabis for chronic pain and other physical illnesses.

Responding to the Royal Commission into Defence and Veteran Suicide, the $739 million commitment will seek to transform the multi-billion-dollar veterans payments scheme to offer more preventative interventions including medical treatments sooner, and through an expansion of "rehabilitation plans" where social wellbeing activities worth up to $2,000 will be supported.

The rehabilitation plans are available for veterans who have an accepted claim for compensation as a result of injury from service, and will support veterans to reconnect with civilian life.

The veterans royal commission identified better supports were needed for service people transitioning out of defence, and streamlining of the veterans payment scheme — which was simplified and streamlined in reforms due to begin from July.

Department of Veterans Affairs chief psychiatrist Jon Lane said much of the distress of transitioning from service came from a loss of identity and culture, and helping veterans find new purpose was critical.

"It's not just treatment for clinical conditions that we need, it's actually things that help someone re-integrate into the wider civilian community, and that's where the group work is so important," Dr Lane said.

"All this sort of stuff happens in the community, it doesn't happen in hospitals … we're talking about supporting treatment in the community that people can access and be in their own environments, around their family and their friends and still working. That's so, so important because that's the sort of functioning you need on a daily basis to recover and grow."

Veterans Affairs Minister Matt Keogh said earlier interventions would be able to help veterans before conditions deteriorated to become more severe or chronic.

"All of these offerings in terms of treatment and rehabilitation are around making sure we're connecting veterans to something that is medically proven to be of benefit to them," Mr Keogh said.

"And because we are processing claims more quickly we're able to make some of these treatments available to veterans, where in the past because under the previous government it was taking so long to process a claim, the treatment wasn't going to be effective by the time we were able to process that claim."

But with inflation again on the rise, government spending is under scrutiny and the four-year funding commitment will put pressure on Treasurer Jim Chalmers to keep spending tighter elsewhere in May's budget.

Mr Keogh said his primary concern was ensuring veterans received the support they needed.

"Ultimately the people who put on our defence force uniform, whether it is navy, army, air force, are owed by our country to ensure they are looked after if they have been injured in their service. That's the primary concern," Mr Keogh said.

"For too long it was too difficult for them to get access to what they deserved, whether it was health treatment, rehabilitation or compensation."

Alongside the $739 million commitment, the government has also launched a $200 million crackdown on dodgy doctors and predatory fee-for-service advocates who have been defrauding the veterans payment.

Veteran access to government-funded MDMA, psilocybin treatments

Australia has led the charge on psychedelic therapy for PTSD, and in 2023 became the first country in the world to permit authorised treatments using MDMA and psilocybin.

However, treatment can be prohibitively expensive, with a minimum six-week course costing about $30,000.

Dr Lane said support for the treatment would be an option of last resort for the most resistant forms of PTSD that would be administered under strict safeguards.

"We're talking about someone who has actually been through all the usual sorts of treatments for PTSD including the trauma-focused psychotherapies, various medications to help the anxiety, depression and anger and potentially substance abuse that typically accompany PTSD," Dr Lane said.

"There's a lot of popular media attention and a lot of people in the community want to use these drugs too, but one of the things I often reflect back to my own patients as a psychiatrist is that if there was a miracle cure for things like PTSD we probably would already have it."

He noted that treatment was also quite intensive, involving preparatory sessions and multiple dosing sessions, which are followed up by "exposure therapy" sessions where "you have to bring up a whole bunch of really horrid, nasty stuff, and you have to actually sit with the distress that that causes".

"It's really intense and hard work. You can't just go and pop a pill and expect a miracle cure," he said.

But Dr Lane said where it was effective, MDMA and psilocybin had been shown to help new brain connections, allowing for new associations that could reduce the distress caused by trauma.