Independent senator Jacqui Lambie has unveiled plans to block the government from being able to deny Australian defence personnel allied health treatment based on cost.
It is a direct response to a $5000 cap, announced in the 2026 federal budget, which is due to come into effect in mid-2027.
Further spending would be subject to government scrutiny to determine if it was effective.
Senator Lambie warned the plan had traumatised hundreds of veterans, whose wellbeing and lives were on the line.
"You have to remember that these are some of our most vulnerable veterans and many of them are already struggling with their mental health," she told AAP on Tuesday.
"This is causing more trauma, and it may be the last straw to tip some of them over the edge."
Her bill, co-sponsored by the Greens, says entitlement to treatment must not be dependent on a cost limit or the number of times treatment is needed.
If it passes, it will provide additional safeguards, as no future governments will be able to put a cap on veteran health spending without laws passing parliament.
"It will give our veterans and diggers confidence that they can get the treatment they need," Senator Lambie said.
A petition she launched to have the cap removed has been signed by more than 31,000 people.
"The government needs to understand that when it comes to our veterans, they're picking a fight they cannot win," she said of the support for her plans.
The bill will be voted on in the Senate on Thursday, but is unlikely to pass the lower house where Labor holds the majority of seats.
Labor's plan has been criticised by the coalition, which joined with the crossbench in the Senate last week to vote for amendments that would remove the cap.
That vote was largely symbolic, given Labor's power in the lower house means it will push on with the budgetary measure.
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