‘The bloody cap has been scrapped’: Jacqui Lambie celebrates Labor backdown on veterans’ health services cap

Labor has backed down on plans to impose a $5,000 cap on health services for defence veterans, caving to growing political pressure after weeks of criticism.

The government announced it would no longer pursue the cap for allied health services, which had been to come into force on 1 July 2027, after a weeks-long campaign by the opposition, veterans’ groups and independent senator Jacqui Lambie.

In a surprise move on Thursday, the veterans’ affairs minister, Matt Keogh, said he would drop the plan after concerns were raised after the federal budget.

“We have been consulting on this measure and we have heard from veterans there are concerns about this approach,” Keogh said in a statement.

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

Keogh had been strongly criticised by veterans and the Coalition after he had initially refused to meet with a group of former servicemen lobbying for the changes to be scrapped.

The opposition leader, Angus Taylor, has called on the prime minister, Anthony Albanese, to sack Keogh.

Labor had announced the policy to stop veterans being forced to go back to a doctor for an allied health referral every 12 sessions. The government said veterans needing more funding over the cap would still be allowed to apply for extra assistance.

Lambie had revealed her own health struggles and access to care in an impassioned speech to the Senate last month, urging the government to drop the $5,000 cap, warning it would have a “devastating impacts” on veterans.

“This cap was cruel, it was dangerous and it should never have been announced in the first place. I’m relieved that the government has finally listened and scrapped it and I thank them for doing it,” Lambie said on Thursday.

“This win belongs to every veteran, family member and Australian who spoke out, lobbied the government, signed the petition and kept the pressure on.

“They knew what would happen to our most vulnerable veterans if this cap went ahead and they fought like hell to make sure it didn’t.”

Taylor accused Keogh of not being up to the job and called the cap “egregious”.

“This was a mistake from the start. It should never have happened,” he said.

“These are people who are prepared to put themselves in harm’s way for our country, serving our country.

“This is a government that has had its priorities wrong from the moment we saw the budget. The budget is unwinding before our eyes.”

A Fair Care for Veterans spokesman, John Armfield, a former navy clearance diver, thanked Keogh for the backdown.

“This is what happens when a government listens to veterans,” he said.

“Veterans, families and doctors came from all over the country to say one thing: this cap would only ever hurt the most badly injured. Today the minister agreed, and we thank him for it.”

“Nobody had to lose for this to happen. The minister made the right call and he deserves credit for it.”