Despite spending $82 million dollars on contract hires last year, the Department of Veterans Affairs has failed to reduce processing times for claims. 

An Abbott-era staffing cap on Australian Public Service (APS) agencies continues to halt direct employment and push departments to take on contractors.

The Veterans' Affairs Department currently has 1,615 APS employees, and 1,246 labour hire employees, meaning contractors make up 42 per cent of its combined workforce.

The department has reportedly spent $82 million on labour hire services with at least 46 different providers.

Finance Minister Simon Birmingham says that the use of contractors allows the department to respond to demand pressures and achieve better service delivery. However, ex-services personnel say their struggles with the department have not eased. 

There is currently a backlog of about 25,000 claims under the Military Rehabilitation and Compensation Act (MRCA), which provides support to injured veterans.

The government’s legislated target for processing MRCA claims is 90 days. However, the average processing claims for MRCA initial liability claims is about 178 days, while the average wait for MRCA permanent impairment claims stands at 186 days.

Insiders say the “revolving door” of employees means knowledge and expertise is not being preserved or passed on.

The Community and Public Sector Union (CPSU) says the extensive use of outside employees is partly to blame for long processing times for veterans' claims.

“This is on the government, not the people doing the work – their hands are tied,” says CPSU deputy president, Brooke Muscat.

Some staff say the department has told them that it plans to increase caseloads for workers, despite some already having to manage more than 250 compensation claims each.

“Putting extra caseloads on already overloaded claims processing staff doesn’t fix this problem,” Ms Muscat said.

“It won’t even make the stats look better because it cannot fix the delays. It won’t change the lives of our veterans who are still waiting for the care and support they have earned.

“Tragically, those delays can have deadly consequences.”

The use of outside labour hire companies has been described as an attempt by the Federal Government to privatise the public service by stealth. 

Veterans' Affairs is the most privatised department, followed by the Defence and Attorney-General's Departments, whose workforces consists of 24 and 21 per cent labour hires, respectively.

Since 2013, the Government has paid $3.2 billion to big consulting companies to do work that many believe the APS can and should be doing.