A Federal Coalition backbencher is lobbying the Government to investigate how much money he believes it owes some older Australian military veterans.

Veterans, including some who served in Korea, Malaya and Vietnam, signed up for compulsory superannuation called the Defence Force Retirement Benefits (DFRDB) scheme between 1948 and 1972.

The Defence Force Welfare Association (DFWA) estimated there are 2,305 pensioners still covered by this scheme.

It calculated there are 52,000 pensioners who are members of the scheme that operated from 1973 to 1991, and around 1,500 are still serving members of the Defence Force.

Upon retirement, those who served more than 20 years could take a commutation, or advance payment, of part of their pension and repay the money with fortnightly deductions based on their life expectancy or actuarial age.

The veterans believed that once they reached age 72, for example, they would have repaid all money owed and their pension payments would immediately return to the full amount.

However they have continued to receive the reduced pension, which has been a bone of contention for them ever since.

A 'disgusting and abhorrent' situation

Federal Member for the Queensland electorate of Wide Bay, Llew O'Brien, recently wrote a strongly worded letter to the Minister for Veterans' Affairs to address the issue.

The Minister, Darren Chester, is a National Party colleague of Mr O'Brien but it has not stopped the first term MP taking a serious swipe at his more senior colleague.

In the letter Mr O'Brien said:

"I am extremely concerned that when members of the DFRDB scheme were sold the option of taking a portion of their pension as a lump sum advance, they did so without the proper and reasonable information from the Australian Government that clearly indicated the deduction would be permanent against the full value of their pension, for the remainder of their life."

He added:

"I have been unable to find any clear advice warning those members who took out a lump sum advance, that their pension would be permanently reduced and would not be restored to its full value once the amount of the lump sum advance was repaid."

Mr O'Brien described the situation as "disgusting and abhorrent". He said he believes the Australian Government will "continue to profit significantly from the underpayments and must make restitution".

"People have been sold a financial product by the Australian Government and they haven't been given proper or reasonable information about it when they were sold it," he said.

"Some of the things that I've had outlined to me not only don't pass the pub test, they don't pass the Australia Day test — they don't pass any Aussie test that would be put forward.

Mr O'Brien says the DFRDB scheme is "fundamentally wrong" and that the Government is profiting from elderly veterans. ( Supplied: Llew O'Brien )

"These are people, who are considered Australian military heroes, have seen battle like you and I can only ever read about in a book and now … the Government is making a profit out of them in their senior years … it's disgusting."

Mr O'Brien did not hide his distaste for the response from the Minister and decided to go public.

"I've asked the Minister to do costings on how we can remedy this, what the cost to Government would be to right what is a fundamental wrong, and what the evidence that I've seen tells me is an un-Australian type of an act," he said.

Mr O'Brien said the Minister had so far dismissed all his approaches.

Mr Chester's office has not responded to interview requests from the ABC about this story.

'The Government owes me': veteran

Lieutenant Colonel Harry Smith wants the peace of mind of knowing his wife, if widowed, will received his pension. ( ABC Sunshine Coast: Bruce Atkinson )

One of those military heroes is retired Lieutenant Colonel Harry Smith who commanded the Australian troops during the 1966 Battle of Long Tan.

The Sunshine Coast-based was prematurely forced to retire from the Army at 43, due to a parachuting accident in 1976.

Lieutenant Colonel Smith elected to "commute" $10,000 of his superannuation so he could buy a house.

He understood his pension would be reduced as he paid back the money but believed once he reached 72 and the "advance" was repaid his fortnightly income would return to the full amount without any deductions.

More than a decade later and the now ages almost 86 he continues to receive the reduced pension because it did not return to the higher amount.

"For 14 years I have been living without that money, so the Government owes me in round figures around $5,000," Lieutenant Colonel Smith said.

"The Government should repay the amount that veterans were deducted for their commutation because they've paid back the loan if you want to call it a loan.

"I have been ripped off. Yes, I borrowed some money, [but] I paid it back.

"We paid back a loan and we should have reverted to the original amount and there's no argument about it.

"I expect the original superannuation payments to revert to their full amount and further that when I die, if I die before my wife, that my widow will get her percentage of my superannuation to which she's entitled until she dies.

"But she is not going to get the full amount because the overall figure is not what it should be."

Lieutenant Colonel Harry Smith (right) with other Vietnam veterans at Remembrance Day celebrations in 2018. ( ABC Sunshine Coast: Bruce Atkinson )

Lieutenant Colonel Smith said successive governments would not pay the money back that he believed they owed him.

"And they don't want to put things on paper when the original deal was made — in my case back in 1976.

"I was simply told that your superannuation deductions will revert to their original amount when you have reached your actuarial age."

According to Lieutenant Colonel Smith, a common sense approach to the issue would be to change the legislation and reinstate the full amounts.

"Not just me but all the other veterans who served, as in my case 24 years, and were entitled to superannuation."

Lieutenant Colonel Smith said he wanted Llew O'Brien to bypass Minister Chester and push the Prime Minister to order the Department of Veterans' Affairs to investigate how many people are affected and the cost of repaying the money.

He said he did not believe the total amount would be significant and he wanted the Government to show compassion.

"They talk about the veterans… have put their life on the line but when it comes to money it's a whole different story," Mr O'Brien said.

"They don't want to do what they should do in terms of money.

Veterans want families cared for

The Vietnam Veterans' Association of Australia (VVAA) has also added its weight to Llew O'Brien's push to convince his colleagues of the need for a rethink.

VVAA national president, Ken Foster, said there had "always been a disappointment among career soldiers" that when they realised that they got to a certain age their pensions were not going to revert to the full amount.

"I haven't found anyone that didn't believe that it would go on for life so … [it's a] disappointment that will hang on," Mr Foster said.

"We feel that we are being ripped off here and we never got a meaningful explanation or a costing of why they couldn't put it back.

National president of the VVAA, Ken Foster, is calling on the Government to provide an explanation for why some veterans have not been paid their full pensions. ( Supplied: Ken Foster )

"We've gone back to the Government and said, 'Show us the information that we were given at the time that we signed that commutation paper to say that it was for the whole of life' and they say, 'Some of that documentation is no longer available'.

"There's always an excuse why they can't explain it.

"It was for the whole of life … but nobody really wants to address it to look at it as a social issue."

Mr Foster said it would mean a lot to veterans to have the money repaid and the ongoing payments increased to the appropriate level.

He said the biggest concern for the majority of veterans was providing for their families after they have died.

"I'd like to make sure that my wife is looked after — at least to the manner that she has been while I've been around," Mr Foster said.

A call for compassion

Mr Foster is uncertain how many Vietnam veterans are affected by this issue.

"I know that number is decreasing every year, every week, every month because the older veterans are dying," he said.

"This group is decreasing … in a few years time it probably won't apply so I don't believe it's a great amount of money."

Mr Foster is also appealing to the Government to help.

"They're always on about the service of the younger veterans and how we've got to look after the younger veterans. They've also got to consider the older veterans.

"Those that were there through Korea and Malaya then Vietnam and so on that are now getting towards the end of their lives.

"They're the ones that were involved with this pension scheme and a little bit of compassion, a little bit of consideration.

"At least give us some reasonable costings that explain why you can't do it and have a meaningful discussion about the whole thing and explain why in the Government's mind they can't be a little bit more sympathetic to what is seen by the veteran community as a worthwhile argument," Mr Foster said.

"We see it as a very simple resolution. The fact they rely on us for publicity. They're always there when there's a photo shot at a memorial or something but when it comes to this sort of thing it's apparently all too hard."