The Department of Veterans' Affairs (DVA) secretly deleted an incapacity policy to prevent an injured veteran claiming compensation. And it never told the veteran or his lawyer.

It was part of a decade-long campaign of delay and denial by the department against Martin Rollins, whose back was severely damaged while serving in the Army.

"After more than 25 years representing veterans in this jurisdiction I've never seen a case like Martin Rollins and the extent the department has gone to," Mr Rollins's lawyer, Greg Isolani, told 7.30.

"Their behaviour's been appalling."

Brian Briggs, a military compensation specialist at Slater & Gordon, said it goes beyond just obstruction.

"This is an act where you've gone to a new level of bureaucratic bastardry on a level I haven't seen before," he told 7.30.

A shattered dream

Martin Rollins and a colleague in a parachute emergency. ( Supplied: Martin Rollins )

Martin Rollins's troubles began during his six years of service as a paratrooper at bases around Australia in the 1980s.

His spine was damaged and he left the army in 1990, receiving a small disability pension from the Department of Veterans' Affairs which rose to $116 a fortnight by 2007.

To supplement that pension and to ensure his independence, Rollins created several small businesses, including a small mortgage operation.

"I could manage my own time, I could self-manage my resources and I was only answerable to myself," Mr Rollins said.

By mid-2007 his back gave out and he had to have spinal surgery.

"It was just excruciating, incredible pain and it just got worse," he said.

He recalls reading the surgeon's notes — that his shattered L5 disc had been removed.

"There were bits of the disc that had fragmented and broken all over the place," he said.

Asking for help — a 10-year fight begins

Martin Rollins' L5 disc had been shattered. ( ABC News )

Before the operation Mr Rollins contacted the Department of Veterans' Affairs for more help to protect his business, making the first of hundreds of frustrated and sometimes angry calls, emails and faxes which continue to this day.

Initially the DVA offered Mr Rollins an extra $25.50 a week.

Months later he was granted 16 weeks of "temporary incapacity" payments of $370 a week to get him through.

When that ended in early 2008, Mr Rollins asked the DVA for "economic loss compensation" to keep his business afloat.

His requests were rejected.

He began living on credit cards and getting help from the RSL just to keep himself going.

"I had no idea what the legislation was, I was just incapacitated. I was just reaching out for help," Mr Rollins said.

Through Freedom of Information, Mr Rollins discovered what DVA officers were really thinking.

During 2008 a DVA official openly called Mr Rollins's incapacity "debatable".

In June, Mr Rollins warned the department about the "very serious potential loss of (his) business".

He put his house on the market and in July his business was gone. By the end of 2008 he had pretty much lost everything.

Only then did he hire a lawyer.

'Bureaucratic bastardry'

Martin Rollins fought the DVA for a decade over compensation. ( ABC News )

7.30 can now reveal that in 2010 the DVA deleted an incapacity policy in order to deny Mr Rollins further assistance.

It was a policy that was specifically meant to help self-employed veterans.

If they became incapacitated they could declare their earnings were zero and claim financial help from the department, even if their business continued to earn an income.

With the stroke of a pen, the DVA had changed the rules and never told Mr Rollins or his lawyer, who were relying on it for his claim.

Mr Rollins and his lawyer didn't learn about the change until 2015 when they discovered the department's deceit buried in a several-hundred-page draft report into his case.

"This constitutes bureaucratic bastardry," Brian Briggs said.

"When you deliberately get rid of a policy, you amend or vary or revoke a policy, and then hide that from the person trying to rely on the benefits of that policy and their lawyer to defeat their claim and also to defeat a claim under defective administration for how they'd treated him — someone should answer for that."

Greg Isolani, Martin Rollins' lawyer, says changes to policy should only be done at the highest levels. ( ABC News )

The Department's intent was clearly revealed in the report.

It said the policy was deleted "to remove any reliance that Rollins or his representative could place on it for the purpose of his outstanding claim as well as the CDDA … claim".

"The deletion of a policy should take place at the highest of levels within the military rehabilitation and compensation commission," Greg Isolani said.

"[The Department] shouldn't, at lower levels, just change policy and to deny this person and entitlement."

'You might as well shoot them in the head'

Martin Rollins suffered chronic pain, stress and depression. ( ABC News )

Over a decade the DVA engaged three external law firms, the Government solicitor and a forensic accountant firm to fight Rollins' claim.

"It's astounding and it's mind blowing that the department would engage and spend that much money across a number of external law firms, including an international firm, to commission a 300 page report over two years rather than spend the money and time to liaise with myself as his representative," Greg Isolani said.

The cost to Martin's mental and physical health increased. He attempted suicide — several times.

"If you take away their employment, there's incapacity, there is housing loss, [there] is relationship loss, there's isolationist depression, stress, chronic pain," Mr Rollins said.

"You might as well just turn up at their house and just shoot them in the head.

"The difference here is the gun is a pen and a paper.

"That's the only difference … the outcome is exactly the same."

An apology and an offer of money — for silence

Compensation lawyer Brian Briggs says someone should answer for the DVA's behaviour. ( ABC News )

Ultimately Mr Rollins won an empty victory in late 2016 when the DVA Secretary sent him a letter.

"On behalf of the department I apologise for your experience and the difficulties you have faced," the letter said.

Two offers were then made: $58,000 for back payment of Mr Rollins's incapacity entitlements, and an "administrative payment" of $69,110.07, which was "conditional upon signing … a Release and Indemnity".

Mr Rollins believes the administrative payment was an attempt to buy his silence but he says he is not going to shut up.

"I fired an email back to the Secretary of DVA — I basically told him where he can shove your $69,000," he said.

Mr Briggs said the department has "certainly breached guidelines".

"There've been delays. There's been maladministration. They haven't acted in good conscience. They haven't acted equitably," he said.

"They've bastardised this claim beyond belief.

"Of more concern is the money they've spent defending this claim over a period of 10 years.

"Hundreds of thousands of dollars — multiple law firms, cover-ups.

"It defies belief that they could get away with this. I'm talking higher up in the executive and senior officer levels."

As for Mr Rollins, the former soldier wants DVA's behaviour investigated to ensure no other veteran suffers the same fate.

In a statement to 7.30, DVA denied any impropriety by its staff but acknowledged "some aspects its client service could have been better" in Mr Rollins' case.