Veterans' Affairs Minister Matt Keogh rejects resignation calls after government backs down on allied health services cap

Veterans' Affairs Minister Matt Keogh says he will keep working with veterans, rebuffing calls to resign as minister after the government backed down on its proposed cap on allied health services for veterans.

Fronting cameras for the first time since scrapping the limit on veteran supports two weeks ago, Mr Keogh said he had listened to veterans and could still "work collaboratively" with them.

"We engaged with the veteran community. We heard, and we responded. And I think that's what people actually want from good, effective government," he said.

"What's really important about how I do my job is the commitment to engage, to listen, to bring forward good ideas and to make sure that we're delivering good outcomes for our veteran community."

The proposed cap would have imposed a $5,000 annual limit on services such as physiotherapy and dentistry unless veterans could demonstrate "clinical need".

The policy announced in the May budget would have saved the federal government $750 million over three years. Still, critics argued it would create barriers for ex-servicemen and women, particularly those with complex, ongoing medical needs.

Senator Jacquie Lambie, who is a veteran, made an impassioned plea on the floor of the Senate not to restrict health services for veterans, describing her own health issues after service.

The backdown also came days after Mr Keogh conceded he had made a mistake when he initially refused to meet with a veterans group who had pleaded for the veteran cap to be axed.

Before the policy shift, frustrated veterans who had travelled to Canberra for the meeting said they had lost faith in the minister, urging he be sacked.

Several opposition members, including Liberal leader Angus Taylor, also called for Mr Keogh's resignation, saying the veteran community had "lost faith" and it was untenable for him to remain in the position.

Today, Mr Keogh rebuffed calls for him to step down, arguing "there's still more to do".

Asked who made the call to scrap the cap, he said it was a government decision.

"We've worked collaboratively with the sector the whole way through, making once-in-a-century reform to improve the veteran entitlement system as well the legislative system."

Department figures suggest that only about 10 per cent of veteran cardholders spend more than $5,000 on allied health services each year.

Advocacy group Fair Care for Veterans spokesman John Armfield, a former Navy clearance diver, thanked Mr Keogh for ditching the health service cap.

"Nobody had to lose for this to happen. The minister made the right call, and he deserves credit for it," he said.

Mr Keogh said the government was "on track" to deliver two-thirds of the recommendations made by the Royal Commission into Defence and Veterans suicide.

That includes increasing fees paid to providers to encourage more to take on veterans as clients and removing requirements for referral.